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Capital Stage Nanotech loses backing from sponsor

German quoted investment company Capital Stage is to renege on its sponsorship of nanotechnology venture capital fund Capital Stage Nanotech, which was launched last year.

Capital Stage had agreed to sponsor the fund when it launched last year. But, following meetings last month, the company decided to withdraw support for the fund, citing a lack of appetite for risk among its investors and an unstable economic environment.

The Zurich-based firm is targeting E80m for its fund to invest in nanotechnology companies across Europe. It confirmed that, despite the setback, it intended to continue its fundraising efforts. ‘We were shocked at the news initially,' said Berndt Samsinger, who leads the team's five investment professionals. ‘But we are now in a position where we are free to find the ideal sponsor. We are in discussions with a number of large financial institutions about this and we are still hoping to have a first close on the fund at E30m within the next few months.'

With the current difficult fundraising environment, many newer firms are looking at the sponsorship model as a means of attracting investment. The move by Capital Stage, however, highlights one of the potential difficulties of raising a significant share of capital from one lead investor.

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