FLV shuts up in US

The embattled Belgian VC firm has closed its US operation as the firm struggles to salvage some value from its ailing fund.

FLV, the Belgian fund manager that specialises in speech recognition and related technology investments, has announced the closure of its US operations with immediate effect in order to proceed with the liquidation of the company. The announcement comes on the back of the publication of Q2 2002 results which show a net loss for the FLV (Flanders Valley Language) Fund of nearly E12m.

FLV reported a 17 per cent quarterly fall in the value of the 31-company investment portfolio, which now has a total value of E41m. The European segment and the American segment constituted 72 and 28 per cent respectively of the fair value of the portfolio.

The firm has been hard hit by a series of set backs and controversies in recent years, the most damaging of which was the seizure of $30m it had contributed towards its FLV Fund Korea. The monies were seized by Korean Hanvit Bank which claimed it as security against a loan it had made to personnel connected with the fund. The firm is also facing a series of law suits from American organisations which invested in Lernout & Hauspie Speech Products, which filed for creditor protection in December 2000.

The firm announced last year that it was to wind up FLV Fund by the end of 2004. However, it has continued to make follow on investments this year and in Q2 committed just over E1m to investments in Europe, Asia and the US. As part of last year’s strategy, the firm revealed plans to return E1.36 per share to investors. The fair value of the fund’s shares currently stands at E2.69.

The strategy of returning funds to investors has been severely hampered by the prolonged contraction of the technology sector, FLV’s main sectoral focus. In the second quarter, the firm recorded exits of just E0.15m via the sale of VoiceIQ and Pumatech.