Digital Sky Technologies, a Russian firm that invested in Facebook, is seeking US$1 billion for a new late-stage technology fund less than a year after raising its last pool, promising investors a stake in the social-networking site in return.
DST has committed Facebook stock valued at US$50 million ($60.9 million) to the fund, meaning limited partners get a chance to own the shares through their investment, said an investor presentation obtained by Bloomberg News.
Early investors were offered the Facebook holding at a 12 per cent discount to an internal valuation of about US$74 billion, as well as a 25 per cent reduction in the fund's management fee.
DST, founded by Russian technology investor Yuri Milner, is among a number of venture capital and buyout firms seeking money after the biggest year for US internet initial public offerings in more than a decade.
Facebook backer Elevation Partners and Zynga investor Institutional Venture Partners are each seeking as much as US$1 billion for their next funds. DST's investments in companies including Facebook, Groupon, Twitter, Zynga and LinkedIn have buoyed returns.
The firm's first fund, DSTG I, has returned a 4.89 times the invested capital, before fees, and produced an annual 151 per cent gross internal rate of return, said the December presentation.
DST Global III plans to make non-controlling investments in late-stage private companies in the global internet industry with a valuation of at least US$500 million. Goldman Sachs Group is acting as placement agent for the fund.
DST gathered US$867 million for its prior fund, which was formed in late 2010. Of the total, US$792 million was invested in 10 companies last year, the December presentation said. The firm invested US$37.5 million in online digital music company Spotify in June 2011 and US$36.7 million in Airbnb in July.
Its highest-profile holding is Facebook, which is seeking to raise US$5 billion in an initial public offering that may value the company at US$75 billion to US$100 billion.
DST first invested in the social-networking site in May 2009 and purchased "substantially" every Facebook common share traded from September 2009 to February 2010, said the investor presentation. DSTG I invested a total of US$490 million during that period in the company at a US$10.8 billion valuation.By Serena Saitto