Qinetiq sets up fund for its spin-out companies

Fund created

The UK defence research commercialisation company QinetiQ has set up a £40 million venture fund in collaboration with the investment group Coller Capital of London, to accelerate the development of its seven portfolio companies.

QinetiQ says the new fund will generate faster growth from its venture portfolio by enabling it to create an independent management team and make a long-term capital commitment.

The fund will have initial assets of £40 million, with half coming from QinetiQ and half from Coller. Depending on the performance of the fund, QinetiQ will own up to 75 per cent of future economic value.

The new fund’s portfolio will comprise partial or wholly owned interests in seven venture assets. QinetiQ’s core venture businesses such as QinetiQ Airport Technologies, which is commercialising a runway debris detection system, and its Global Positioning System business will remain within QinetiQ’s internal venture structure.

The creation of the new fund will free the existing venture team, led by Hal Kruth as chairman and Mike O’Connor as managing director, QinetiQ, to focus on incubating core businesses and developing QinetiQ’s pipeline of new ventures.

Kruth said the creation of QinetiQ Ventures “enables us to accelerate value creation within our existing portfolio and provides a long-term model for scaling up our future venturing activities”.

Jeremy Coller, CEO of Coller, said, “Through this joint venture, we will help QinetiQ to make more money faster through an enhanced engagement with commercial markets.”

The assets to be transferred into QinetiQ Ventures LP at inception are:

• Aurix Limited – Real-time audio mining (88 per cent subsidiary)

• Metalysis Limited – Manufacture of high-value metals from low-cost oxides (16 per cent investment)

• Omni-ID – Low cost passive RFID technology that works anywhere (100 per cent owned)

• QinetiQ Nanomaterials Limited (QNL) – Nanomaterials IP creation, design and manufacturing (100 per cent subsidiary)

• Quintel Technology Limited – Next-generation antenna systems for mobile networks (50 per cent joint venture)

• Stingray Geophysical Limited – 4D seabed reservoir monitoring systems (19.9 per cent investment)

• ZBD Displays Limited – Zero power point-of-purchase display solutions (31.6 per cent investment)