Ross Leinweber of Whitefish Bay is preparing to launch the Milwaukee market’s first Badger Fund of Funds.
[caption id="attachment_333317" align="alignright" width="376"] Leinweber[/caption]
The target range for the fund is about $12 million to $15 million.
Leinweber, who previously operated Cedar Road Capital in Port Washington, has been a trader since 1996. He is also active in the real estate market, and spent 15 years working for a trading firm in Chicago before moving to Milwaukee with his family in 2013. He’s also an angel investor, and has invested in six gener8tor companies. Milwaukee-based smart floor analytics firm Scanalytics Inc., Madison-based apartment search service Abodo, Los Angeles-based feline health monitoring litter creator Pretty Litter and Minneapolis-based youth athlete health management app Player’s Health are among them.
“Cedar Road Capital was a vehicle built to manage my trading and certainly with the launch of the fund, 100 percent of my time and capacity will be dedicated to it,” Leinweber said. “My last day of trading was Sept. 15.”
Leinweber is currently undergoing the Badger Fund of Funds due diligence and training process, which takes about three months, said Ken Johnson, a partner in the Badger Fund. He is about halfway through the process, and at the end will make a presentation to the Badger fund committee, which will then decide whether to invest.
If he gets the OK from the Badger Fund of Funds, it will invest 40 percent of the fund. Once he completes fundraising, Leinweber plans to invest in advanced manufacturing, water resources and other strong Milwaukee industries, he said.
“I believe in being industry agnostic,” he said. “I’ve always believed that opportunities kind of present themselves in unique ways and having the capacity to pursue those opportunities is exceptionally important.
“I think certainly Milwaukee, from a network perspective and from a geographic perspective, provides a lot of opportunity, but my goal with everything I’m doing is to create a fund vehicle that is built for the next 20 years. The fund will invest anywhere in Wisconsin if the opportunity provides it and long term, this will be a regional fund.”
The state of Wisconsin awarded $25 million in 2013 to establish the Badger Fund of Funds, which raised another $10 million from the private sector and agreed to create six to eight venture capital firms across the state. Santa Fe-based Sun Mountain Capital, which specializes in regional investment programs, and Fitchburg-based Kegonsa Capital Partners are partnering to manage the Badger Fund of Funds. They plan to have all of the regional funds established by the end of 2018. So far, the fund managers they have selected have established the Idea Fund of La Crosse, Winnebago Seed Fund LP in Neenah and Rock River Capital Partners Fund I, which is based in Madison.
It has taken quite a while to find the right fund manager for the Milwaukee market, the companies said.
While he initially doubted the Badger Fund of Funds model could work in Wisconsin, Leinweber said he came around after a couple of years. The success of the existing regional funds helped convince him. Idea Fund has raised $13 million, Winnebago Seed Fund has raised $11 million and Rock River Capital Partners is currently raising its fund, which will be about $15 million.
“He saw that David and John were successful and that really motivated him,” Johnson said. “I think Ross will be good for Milwaukee.”
Next, Johnson plans to establish a growth fund in Milwaukee to focus on follow-on investments, like Rock River Capital.