Union BanCal

0

Union BanCal Venture Corp.

Specialty: Customers and potential customers of Union Bank of California

Capital Under Management: $17 million

Amount Invested in 1996: $1 million

Union BanCal Venture Corp. is not your traditional venture capital firm. Established in 1967, the company is a wholly owned subsidiary of San Francisco-based Union Bank of California, which was formed last year following the merger of Union Bank and Bank of California.

Even before the merger, Union BanCal was largely dormant from 1990 to 1994, doing only three deals during that time. But the sleepy firm has recently emerged from its slumber, funding six new deals in the last 18 months.

“It wasn’t an activity that was generating a lot of activity for the bank,” said Union BanCal President Robert Clarke, explaining the decision to go dormant in the early 1990s. “But now we’ve begun to find opportunities and focus on (venture capital funding) again.”

All of Union BanCal’s $17 million in capital under management came from the Union Bank of California, unlike other firms that usually raise their funds from multiple institutional investors.

About half of the $17 million has been invested to date, although the firm has another $10 million available to it from the parent company when its current funds are exhausted.

Union BanCal is the arm of Union Bank of California that invests money in firms with high growth potential that are either customers or potential customers of the bank, said Clarke.

Nearly all of those firms have come from the communications field, including several small cable companies and radio and TV broadcasters. Clarke declined to give any specific names of companies.

“We like to invest in companies with a two- or three-year operating history. We haven’t done any start-ups in the past three years,” said Clarke. Union BanCal’s deals range from $500,000 to $3 million.

Most ventures funded by Union BanCal are in California. The firm’s venture capital recipients in the state are divided about 50-50 between Northern and Southern California.

Union BanCal also funds out-of-state companies, which make up about 30 percent of its investments, Clarke said.

Operating out of an office in downtown L.A., Union BanCal has a small staff with only one investment professional.

Douglas Young

No posts to display