In one of the toughest years ever for venture capital, the Investor AllStars awards highlighted those individuals and funds shining through the gloom.

Venture capital has not been immune from the general apathy and pessimism that’s crept over all forms of investing over the past two years. But casting your eye over the cheerful crowd assembled at London’s Park Lane Hilton on 23 September for the Investor AllStars awards, you’d have been hard pressed to guess that anything was wrong.

Presented by M&A Magazine's sister publication Business XL magazine, fund management group MTI and specialist investment bank GP Bullhound, these awards have become a keenly awaited event in the venture capital calendar and the 2009 awards were no exception, recognising some remarkable achievements in the face of one of the most challenging business environments in living memory.

Venture Capital Fund of the Year
Winner – Northzone

Other nominees: Index Ventures, Prime Technology Ventures, Wellington Partners, DFJ Esprit, Intel Capital, Crédit Agricole

Steered with a deft touch by general partners Torleif Ahlsand, Pär-Jörgen Pärsson and Arve Johan Andresen, Northzone is a Scandinavian venture capital partnership with bases in Oslo, Stockholm and Copenhagen. It has achieved top-tier returns in five funds since 1994 and now manages some €355 million (£322 million). Andresen, whose previous experience encompasses medical equipment group Laerdal, Nestlé and management consultancy McKinsey, joined Northzone eight years ago. He says the partnership seeks out areas ‘where we can see commercial potential in a minimal time’ and which do not rely on government intervention. Controversially, he includes cleantech in that category, as he sees it as ‘a trend that will last for a very long time’.

Exit of the Year
Winner – Sofinnova Partners with CoreValve

Other nominees: Albion Ventures with Grosvenor Health, Catalyst Investors with MessageLabs, Index Ventures with Trolltech, Sofinnova Partners with Purple Labs,
TVM Capital with Direvo, AXA Private Equity with Photonis

Paris-based venture capital group Sofinnova spotted the potential of CoreValve’s system to provide a minimally invasive alternative to open-heart surgery six years ago, when it was the only institutional subscriber to the company’s £4 million Series A fundraising. Last February, medical devices giant Medtronic agreed to buy the California-based company for an initial £437 million, with further milestone payments to come. Now managing £1 billion, Sofinnova has funded more than 500 companies since 1972, of which more than 100 have floated. Managing partner Antoine Papiernik, an experienced venture capitalist on both sides of the Atlantic who joined the group in 1997, is a fan of the life sciences sector and relishes the fact that he proved CoreValve’s doubters wrong.

VC Personality of the Year
Winner – Sean Seton-Rogers of PROfounders Capital

Other nominees: Frédéric Court of Advent Ventures, Dennis Atkinson of ePlanet, Davor Hebel of Fidelity Ventures, James Livingston of Foresight Group, Mike Reid of Frog Capital, Max Bleyleben of Kennet, Pär-Jörgen Pärsson of Northzone

Rejecting the security of a job with big-hitting venture capitalist Balderton Capital, Sean Seton-Rogers this year teamed up with Lastminute.com entrepreneur Brent Hoberman and Bebo founder Michael Birch to set up PROfounders Capital. He tells his story in this month’s Trailblazers interview (see page 16).

Cleantech Investor of the Year
Winner – Environmental Technologies Fund

Other nominees: Foresight Group, Frog Capital, Good Energies, Northzone, RWE, Scatec, Siemens, Virgin Green Fund

Partner Patrick Sheehan says the Environmental Technologies Fund, which raised £110 million at its first close in 2006, aims not only to invest but also to provide guidance to green companies with growth potential. After 21 years with 3i and ‘starting up a few Silicon Valley operations’, Sheehan teamed up with experienced venture capitalist Henrik Olsen and City veteran Peter Horsburgh, and the fund’s backers include Swiss Reinsurance and Dutch fund manager Robeco.

‘You need to marry great ideas with the ability to execute them,’ he stresses.
‘We back young private companies, which we aim to sell on or float after anything from three to eight years.’ The fund has so far backed six businesses, among them South Yorkshire-based Metalysis, which boasts a new clean technology for making titanium powders.

Buyout/Development Capital Fund of the Year
Winner – Investcorp Technology Partners

Other nominees: Barclays Ventures, Index Ventures, Kennet

Investcorp has some $1 billion (£625 million) under management after its third fundraising and has achieved 13 exits in five years, providing investors with a 30 per cent internal rate of rate of return, says co-head of technology investment Hazem Ben-Gacem (pictured). With US institutional backers including Calpers and Cornell University’s Endowment Fund, a team of five in London and five in New York seeks to invest between $20 million and $70 million in companies capable of achieving at least 15 to 20 per cent annual revenue growth.

‘We stick to our strategy and don’t get tempted by apparently golden opportunities outside our chosen areas,’ explains Ben-Gacem, who cites average exit premiums of between two and four times initial investment. ‘We are humble, equal partners with management,’ he insists. ‘Too many private equity investors try to take on management, but that is naive.’ Almost all Investcorp’s exits have been trade sales, but that could change.

Some time ago, the fund bought 25 per cent of German security software concern Utimaco and was taking it private when Sophos, a major world sector player, bought it, paying Investcorp a 93 per cent premium in shares. The enlarged group generates annual revenues of $400 million and Ben-Gacem suspects that a float, ‘probably in the USA’, is likely next year. Another float candidate, this time in the UK, is Moneybookers, a fast-growing online payment company that Ben-Gacem backed in 2007. The second half of 2011 is a likely time for an IPO.ﾺ

Equity Gap Fund of the Year
Winner – NorthStar Equity Investors

Other nominees: Create Partners, Finance Wales, High Tech Gründerfonds, NESTA,
Oxford Capital, Sting Capital, UMIP Premier Fund

Marion Bernard, chief executive of Newcastle-based NorthStar, says the firm bridges the investment gap for early-stage companies and is determined to show that this end of the market ‘is a very exciting place to be’.

NorthStar has two funds, both seeking to harness entrepreneurial talent in the region. One is the £30 million Co-Investment Fund, in partnership with the North East Regional Development Agency, which puts between £100,000 and £1 million into each company it backs. The second is the even earlier-stage Proof of Concept Fund, with £12 million invested, which typically puts in between £60,000 and £90,000 of debt.

Gaining information and introductions through local business angels and other contacts, NorthStar has invested £28 million itself since 2005 and brought in £70 million from co-investors. The Co-Investment Fund has backed 40 ventures out of 500 opportunities appraised since June 2008. Recent investments include Vertical Wind Energy, maker of vertical-axis turbines for domestic and small-scale commercial users, and amBX, a spin-out from the Philips group that makes sound and sensory devices for online, computer and TV games. NorthStar is also working with Durham University on Re-Innovate, which uses disruptive cell cultures to help pharmaceutical research and development.    

‘We are finding great potential in an area that many venture capitalists are not keen on,’ says Bernard. ‘You find a nugget, a project, a person or a service, and you fill in the gaps to make it fulfil its promise.’

VCT of the Year
Winner – Albion Ventures

Other nominees: Beringea, Core Capital, Foresight Group, IBIS Capital, Maven Capital Partners

From tracking illegal timber logging in the Congo to London pubs, Albion Ventures casts its net wide, says managing partner Patrick Reeve. With £200 million under management in seven different trusts, Albion (formerly Close Ventures) aims for a high-growth, low-risk portfolio with significant asset backing.

Besides timber-tracking specialist Helveta, poised to benefit from tougher laws against illicit logging, and the ‘magnificent’ Prince Albert freehold pub in London’s Elgin Avenue, Albion has investments in a health and fitness club in Weybridge (freehold again), a drug-testing concern, and a cinema in Cambridge. An investment ‘must be in a very good market, unique or with some rarity and well-sited’, explains Reeve, adding that an assessment of the people involved is crucial. He adds that healthcare is particularly interesting at present. ‘We are looking at four deals, all in healthcare in Spain’.

Albion is flexible on timing. The drug developer, vested in 2005, has grown tenfold since then with ‘no end in sight’ and Albion has held the cinema for ten years. But, ‘where it is appropriate, we’ll take a short-term view’.

Service Provider of the Year
Winner – Bird & Bird

Other nominees: Brown Rudnick, Kreos Capital, Marriott Harrison, Osborne Clarke, Pinsent Masons, Rosenblatt Solicitors, Speechly Bircham

International commercial law firm Bird & Bird, with 21 offices in Europe and Asia, built up its reputation in the life sciences field, says UK venture partner Angus Miln: ‘Lots of companies rich in intellectual property came in for advice on protecting their ideas and brands when I joined in 2007, but we lacked an investor side.’

That has now changed. Venture capitalists and investment groups such as Index Ventures, Fleming Family & Partners and Balderton now use Bird & Bird, which, says Miln, means ‘we get more credibility and access to companies’. Citing clients including Glasses Direct and online jeweller Astley Clarke, he says the firm ‘picks up companies early and introduces them to venture investors. We take an early hit that way, but the business later becomes profitable.’

Outstanding Contribution
Winner – Hermann Hauser of Amadeus Capital Partners

Other nominees: Ronald Cohen of Bridges Ventures, Anthony Clarke of GLE, Michael Elias of Kennet Partners, Ross Ahlgren of Kreos Capital, Arve Andresen of Northzone, Oliver Potard of Sofinnova and Frank Böhnke of Wellington Partners

Cambridge-based entrepreneur Hermann Hauser co-founded Amadeus in 1997 with partners Anne Glover and Peter Wynn. Amadeus now has some £460 million under management and holds 40 active investments in technology companies across Europe and, ‘selectively’, in Israel. Hauser has also had a hand in founding successful companies, including Acorn Computers, Active Book Company and NetChannel.

Companies backed by Amadeus include voice recognition software developer Entropic Research Laboratory, which was sold to Microsoft, and Solexa, a DNA sequencing expert that was acquired by the Illumina group. Under Hauser, Amadeus, which often plays an active boardroom role in companies it backs, strives to have ‘the vision to recognise a technology that is indeed special – a great leap forward, not just a wrinkle’.

Alchemy’s Triumph over Adversity Award
Winner – Sonim Technologies

Other nominees: Clarity Commerce Solutions, Little Chef, Smart Trust, STV

‘Rugged’ mobile phones are the speciality of California-based Sonim Technologies. Steered by CEO Bob Plaschke, Sonim has suffered several reversals of fortune since it went from start-up stardom to near bankruptcy in the early years of this decade.

The company is now expanding from its ‘blue and grey collar’ customer base with the launch of the XP3 Quest, which can function at temperatures between -20 and 55 degrees Celsius. Sonim, whose new model underwent 600 tests to ensure it met military specifications, is adding more capabilities to satisfy highly specialist users.

Outstanding Contribution
Winner – Hermann Hauser of Amadeus Capital Partners

Other nominees: Ronald Cohen of Bridges Ventures, Anthony Clarke of GLE, Michael Elias of Kennet Partners, Ross Ahlgren of Kreos Capital, Arve Andresen of Northzone, Oliver Potard of Sofinnova and Frank Böhnke of Wellington Partners

Cambridge-based entrepreneur Hermann Hauser co-founded Amadeus in 1997 with partners Anne Glover and Peter Wynn. Amadeus now has some £460 million under management and holds 40 active investments in technology companies across Europe and, ‘selectively’, in Israel. Hauser has also had a hand in founding successful companies, including Acorn Computers, Active Book Company and NetChannel.

Companies backed by Amadeus include voice recognition software developer Entropic Research Laboratory, which was sold to Microsoft, and Solexa, a DNA sequencing expert that was acquired by the Illumina group. Under Hauser, Amadeus, which often plays an active boardroom role in companies it backs, strives to have ‘the vision to recognise a technology that is indeed special – a great leap forward, not just a wrinkle’.

Deal Envy of the Year  
Winner – Playfish (Accel Partners/Index Ventures)

Other nominees: De La Maison (NextStage Capital), Ethical Superstore (NorthStar Equity Investors), Greetz (ePlanet), Spreadshirt (Kennet), Mimecast (Dawn Capital), Spotify (Northzone/Wellington Partners), The Foundry (Advent Venture Partners), Wonga (Greylock Partners/Accel Partners/Dawn Capital)

A developer of games for social networks, UK-based Playfish received $17 million of Series B funding from Accel Partners and Index Ventures in October last year. At the time, CEO Kristian Segerstrale, an experienced games entrepreneur who co-founded Playfish in 2007, was able to boast that four of the company’s five games were on Facebook’s top ten games list.