index Ventures, the EL&& pean venture capital firm best-known for its invest-

:$-: , =,, : .;. a ogy companies.

I ' - While Index will continue investing in start-ups, the Switzerland-based firm's move into later-stage ven- ture capital mirrors US growth of similar funds.

Investments in later-stage

I companies already generat-

l ing strong revenue growth are less risky than tradi-

I tional venture capital, which often involves backing ideas before they reach market.

Index has hired Dominique Vidal, the former chief exec- utive of Yahoo Europe, and Guido Magni, former global head of medical science at Roche, to lead the invest- ment teams of the new fund.

Mr Vidal told the Finan- cia! Times: "The European venture capital industry is not very old. We're talking about an industry that is 1&15 years old and this has put a lot of money into com- panies, some of which are now maturing."

He said the fund would make about 15 investments worth an average of 625m in companies growing revenues by at least 25 per cent a year and with revenues of about ElJmB20m. It has offices in

--- .-- ---- -. - Some of the biggest ven-

ture capital fundraising in the US last year was for later-stage investing, such as the $3bn raised by T6chnol- ogy Crossover Ventures, the Silicon Valley fund, and the $ a m fund raised by Carlyle Group for "growth capital".

Europe is catching up, as later-stage investments rose 44 per cent to C593m in the third quarter of 2007, lifting the median deal size to a record of more than €3m, according to Ventureone and Ernst & Young.

US venture capital firms raised $6.2bn to target more mature companies in the

- ".- .,-.- - tions ' t f ia f worked on a ' E750m h f f s a t i o n of BOX-

first half o f 2007, against only $2.3bn in all of 2006, according to Thomson Financial and the National Venture Capital Association. Mr Vidal said his firm had

already made investments in later-stage companies, such

clever in 2002 - troubled Ger- man lender WestLB and -ads c f B r - 7- -- -,--;T1'y*

The. deal would make Terra Firma the only remahi+ defendant in the long-mmng lawsuit, thrust- ing the fjrm's financial mod- elling work on the securiti- sation into the spotlight.

The unexpected shift comes as WestLB's owners announced plans to inject €2bn into the bank to offset expected 2007 losses and temporary writedowns.

The settlement is unlikely to be cheered by Terra

as Russian e-commerce web site Ozon, which last year raised $lam in a fundraising round led by Index.

Last week, Index was cele- brating the success of its investment in MySQL, the young technology company that was acquired by Sun Microsystems for Slbn.

Other notable investments by Index include Betfair, the betting exchange, FON, the global wifi network, and Addex Pharmaceuticals, which floated last. year with a market value of €%Oin. -"

Firma head Guy &ds, the legendary dealmaker cur- rently focused on EM1 after a E3.2bn takeover of the music group. Sources close to the lawsuit said the sue of Natixis's claim - if suc- cessful - could strain the pri- ~ e G F i r m a chief Guy Hands fa& a potential pay-out In excel vate equity group. "All guns are now squarely focused on the deal was closed, plung- tisation was completed, with Terra Firma," said one. ing WestLB into crisis and WestLB and CIBC serving as

A formal announcement of forcing the resignation of its joint lead managers. the settlement is expected star banker, Robin Saunders. Natixis, which bought tomorrow at the High Court. Like most securitisations, E200m of Boxclever debt

Natixls's case against the the Boxclever financing was from CIBC in October 2002, firm centres on whether sen- based on a highly complex says it lost nearly half that ior Terra F'irma employees model of the business's amount when the company were warned that certain future cashflows, such as its defaulted on the notes the finaocial projectkm for Box- income from television following year. The French clever were flawed, but rental -ts. bank is seeking around failed to inform investo~s. Terra Frrma, then known £135m in damages, including

Boxclever, created in 2000 as Nomura Principal interest and legal costs. by a merger of several equip Finance Group, worked on Terra F'irma denies wrong- ment rental companies, more than 200 versions of doing and claims th& . aeftiedWlua a-9ear &es. t d a @ . e P c w & e f ? r ~ p ~ ~ , , & s ~ as -.. lead - map&+

It : Americans lose faith in Citi and Merrill

Citigroup and Merrill Lynch's standing among US

. ' citizens has plummeted as a . - result of multi-billion dollar capital injections by sover- eign wealth funds, according to new research that high- lights simmering public opposition to investments by

- 4 foreign governments. Over half of the 1,000 peo-

, . ple polled by the market research group Strategy One said they "trusted Citi- group less" after its recent decision to tap Middle East- ern and Asian sovereign funds to ease its financial constraints.

In Merrill's case, 45 per . cent of the respondents said

their trust in the bank had fallen since hearing of investments from foreign state funds, according to the research to be published

day. The negative public

4.

response to cash injections that helped Citigroup, Mer- rill Lynch and other Wall Street banks to cushion the blow of the credit squeeze underlines growing fears over the role of sovereign wealth funds.

After initially welcoming the capital infusions, politf- cians such as Senator Hil- lary Clinton and Chuck

Schumer, the influential New York senator, have begun voicing concerns over the role and transparency of foreign state-controlled enti- ties.

Mrs Clinton, a Democratic presidential frontrunner, told a debate in Nevada last week: "I am very concerned a b u t this.

"We've got to know more

Trust in Wall Street hit by foreign bailouts

% of respondents Menill Lynch

Trust somewhat

~ ,. , . .

about them, they've got to be more transparent."

The new research - can-ied out early this month between the two waves of foreign investments in Citi- group and Merrill - also points to an underlying cur- rent of protectionism within the US public, which could be exacerbated by the rising tbreat of a recession.

"The Citigroup figure is staggering," said Laurence Evans, president of Strategy One, which is owned by the public relations group Edelman.

"There is a xenophobic ele- ment to it. The biggest con- cern is uncertainty: people don't know how much influ- ence sovereim wealth funds

Temasek and the Kuwait Investment Authority. Both banks declined to comment. ,

However, they have both stressed that the new inves- tors have bought minority stakes and will not get any board seats or management role.

Nevertheless, only 4 per cent of Americans polled by Strategy One said they ' trusted Citigroup or Merrill more after the investments, with about one in four say- ing the sovereign funds' presence had not changed their perception of the two companies.

Mr Evans said Citigroup appeared to be more closely associated with the troubles stemming from the liquidity -

wil l have." , crunch &an Merrill, proba- Citigroup raised more than bly because of its large retail!

$20bn from investors includ- banking presence. ing the Abu Dhabi Invest- ' ;. When asked whether they

i+Tpiii%%X£~:.'K+ ? ..; & ment Authority and the Gov- had heard of .Citigroup in . .. ernment of Singapore Invest- relation to subprime or & ;2. . - . .

0' 10' 20' 3 0 ~ 4 0 ' .~ 0 ment Corporation. . mortgage lending difficul-

Merrill Lynch received ties, 41 per cent of respond-. Sourn: StrategyOne more than $12bn from inves- ent said yes, compared with!

Based On a wNey Of low tors such as Singapore's 37 per cent for Merrill. I ;$ ..