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Former Autonomy Owner Launches $1 Billion Fund Amidst Fraud Investigation

February 13, 2013

Nothing suggests a comeback like raising a billion fund on the same day your former company is being investigated for fraud.

Mike Lynch, the former CEO of Autonomy, has raised $1 billion to establish the Invoke Capital fund, where he plans to support small R&D technology companies, the Telegraph reported. He’s secured financial investment from a number of institutional investors, including sovereign wealth funds, and enlisted the help of number of former Autonomy executives, including former finance chief Sushovan Hussain.

That’s a lot of confidence to invest in the former CEO of a company whose acquisition has been dubbed by analysts as one of the worse corporate deals, even paling in comparison to AOL’s acquisition of Time Warner that later came to represent the epitome of the Internet bubble. HP bought Autonomy for $10 billion in 2011, and has since written off $8.8 billion of its worth in the face of allegations the acquired company had misrepresented its worth.

HP has attributed more than $5 billion of that write-off “willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers,” adding, “These misrepresentations and lack of disclosure severely impacted H.P. management’s ability to fairly value Autonomy at the time of the deal,” the New York Times reported.

Lynch has denied the accusations and maintains that HP mismanaged the acquisition.

“We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the F.R.C.,” Lynch said in a statement.

The incident is being investigated by both US and Britain financial regulators.

The Invoke Capital fund will help fledgling companies grow by acquiring larger businesses and using the resulting infrastructure to help smaller companies launch products.

“Invoke Capital is a UK-based technology investment company,” the firm describes itself on its website????. “We represent the complete, premier technology management team, and are dedicated to delivering significant value for investors and creating real growth in the technology landscape.”

Invoke has already has already invested in security software business Featurespace.

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Filed Under: Finance, Global

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