Intel Capital, which is one of the largest corporate venture funds in Silicon Valley, is prepared to sell $1 billion of its asset portfolio, according to rumors doing the rounds on Monday. The move appears to have been inspired by the investing strategy of the new boss, Wendell Brooks.
A logical move from Intel Capital
Betsy Van Hees of Wedbush Securities believes Brooks has spent enough time at Intel Capital to be able to formulate a strategy.
“It makes a lot of sense they’d be paring back on some things and making investments in other things that are going to drive their future,” the analyst said.
Voss Capital is betting on a housing market boom
The Voss Value Fund was up 4.09% net for the second quarter, while the Voss Value Offshore Fund was up 3.93%. The Russell 2000 returned 25.42%, the Russell 2000 Value returned 18.24%, and the S&P 500 gained 20.54%. In July, the funds did much better with a return of 15.25% for the Voss Value Fund Read More
It is estimated that the company is selling assets worth $1 billion, and if this is accurate, it would still represent a relatively small part of Intel Capital’s portfolio. For example, Valustream, one of its portfolio companies, was sold last year for $1.2 billion. There are about 430 active investments with the chip maker.
Bloomberg News was the first to report that Intel’s venture arm was trimming its portfolio. The investment fund chose not to make any comments, but it referred the media to a blog post by Brooks which says that the fund will take a fresh look at what help it can provide in leveraging the “broad ecosystem of the parent company.”
What’s the plan?
Brooks joined the chip maker in September 2014 to oversee mergers and acquisitions, and in November, he joined Intel Capital. Brooks, a former investment banker, became president of Intel Capital in January. Brooks said that Intel Capital will continue investing “at a robust $300 million to $500 million annual pace” in technologies “where Intel excels.”
In a blog post on Feb. 4, Brooks wrote that the company’s thesis is to invest in areas where Intel’s technology and other resources will make positive differences.
“First and foremost, we want to invest with companies that complement our business strategies. We also have a pathfinding objective, backing entrepreneurs who can create disruptive new possibilities,” he said.
As an example, Brooks revealed that the chip maker has invested in more than a dozen startups with the hope that they will help the company develop its RealSense technology. RealSense is described as a motion-and-depth sensing camera technology that “sees like human eye [sic].”