Intel Capital’s ‘fresh look’ leads to $1bn portfolio sale

Intel Capital’s transition under the new leadership of Wendell Brooks hotted up going into the weekend, with news emerging the group is set to divest up to $1bn of its portfolio through a secondary sale.

Bloomberg reported the group was undertaking a secondary sale, advised by Swiss bank UBS.

GCV has been fielding a number of enquiries on the topic since the news broke, about what the move means. Intel Capital declined to comment, besides indicating a blog post Brooks wrote last month.

In the blog post, there was an indication that Intel’s investments would not slow down. Brooks said the group plans to continue investing at a “robust $300 to $500m annual pace” “focused across the full spectrum of technologies where Intel excels”.

Brooks added there was a “fresh look” at how Intel is helping its portfolio, beyond financial support. The unit’s “thesis is to invest in areas where Intel’s technology and resources can make a difference to the portfolio company. First and foremost investing in companies that complement Intel’s business strategies”.

The market’s reaction has generally been surprise, with a number of people saying it is a big shift and wondering what it means for Intel Capital’s wider approach. That said there is definitely precedent among other groups for corporate venturing units taking on a new approach under new leadership. Siemens Venture Capital also repositioned its portfolio using a secondary, after current leader Ralf Schnell took over. Fortune also indicated Intel Capital carried out a secondary sale in 2002 to 2003, after the dot.com bubble burst.

Also, given Intel Capital has invested more than $11bn, and deployed more than $500m last year, there is a degree that the shift is a repositioning rather than a fundamental shake-up.

The Wall Street Journal said it had been indicated the move was in line with a shift of strategy initiated by Intel chief executive Brian Krzanich, who was named to the post in May 2013 when Paul Otellini retired. Brooks recently took over as president of Intel Capital from long-time head Sodhani.