UK group buys Lucent startup portfolio

A UK company has bought up Lucent Technologies' venture capital investments in a deal that will provide the telecoms equipment maker with much needed cash and rid it of micro-managing startups.

Lucent has sold 80 per cent of its New Ventures Group (NVG), which invests in companies started by Lucent's Bell Labs unit, to international specialist investment manager Coller Capital of London.

Financial terms were not disclosed, but analysts said that any cash Lucent received would be a bonus. The beleaguered company, which has struggled through falling sales and massive layoffs in the past year, lost $14.2bn on revenue of $21.29bn.

NVG, which was formed in 1997, has a portfolio of 27 companies which includes such businesses as Celiant, the largest supplier of wireless base station amplifiers in the US, and Intrado, a provider of systems and services for network databases that route emergency 911 calls to public safety answering points.

As part of the agreement, Lucent will retain a 20 per cent interest in the group, which will be called New Ventures Partners II LP. The staff will leave Lucent for the new group.

Coller Capital, which currently has in excess of $1bn under management, specialises in buying stakes and portfolios from the original investors.

Lucent is not alone in seeing its venture capital arms struggle. Companies from Microsoft to Nortel Networks to Compaq Computer have taken big losses in these portfolios.