Battery Venture announced on Thursday that it has hired a new partner for its private equity business. The new partner is software executive Russell Fleischer, who will hope to find new deals in the enterprise software sector.
This Boston-based company, which was founded in 1983, is perhaps better known for its venture capital side, but it has a long-history in backing up companies with private equity as well. Previously it has provided equity for success stories such as Marketo, Splunk and HighJump.
In fact, Fleischer was part of HighJump, until Accellos bought it from Battery Ventures earlier this year. The partnership goes even further as Fleischer’s previous company Healthvision Solutions was also owned largely by Battery Ventures.
During his time at Healthvision, which is a healthcare information-technology provider, the company revenue increased from $25 million to an impressive $70 million. The company also grew its personnel from 100 to well over 300 people.
In addition, Fleischer’s impressive portfolio includes companies such as TriSyn Group, Adams Golf, Vero Software, Data Innovations and Rogue Wave Software.
Dave Tabors, a general partner at Battery, said in a statement, the company trusts Fleisher’s operational expertise, covering wide range of subjects from financial technology to healthcare, “will help him find and develop promising investment opportunities”.
Fleischer told in the same statement that he is ‘thrilled’ to join the team and can’t wait for “collaborating with many more talented company builders in my new career as a professional investor.”
Battery Ventures has often worked with an investment model that provides funding mainly through venture capital, while directing around 20% of its funds to private equity. It provides funding for companies during different stages from seed to buyouts. In the past, its focus has mainly been on mid-market buyouts, with the company operating on global scale.
The model is a bit unusual, since venture capital companies typically have a separate growth-equity fund to use. According to Reuters, Battery is currently investing from a $900 million fund, which it was able to raise last year and “investing in buyouts from the same cash pool as venture investments is fairly rare in the business”.
The addition comes at a time when private equity isn’t doing its best. We recently reported about the market climate. At the moment, deals are hard-to-find, although the returns can be extremely profitable. PE Hub quoted Preqin’s data, which shows private equity companies standing on funds of $1.2 trillion.
By appointing Fleischer, Battery Ventures hope is to scout for the right deal and have a negotiating advantage with the industry expertise of Fleischer. It’s also a way to compete against the big PE companies.
Reports have indicated that the tough climate is more advantageous to the big firms, as they have more room to negotiate. Smaller firms can’t take very tough negotiating terms and therefore, will need to find the best talent to support deal making as well as deal finding.
It is understood that Fleischer will work from Battery’s Boston headquarters. The company is also established in Silicon Valley and Israel.