In a bold move into the world of venture investing, Indianapolis-based The Heritage Group is creating HG Ventures, a corporate venture unit focused on early and growth-stage companies. The company says investment activity in the new arm is expected to quickly reach $50 million annually, but could grow to $400 million over the initial five-year investment period. Kip Frey, a nationally-recognized entrepreneur and investor, who most recently served as vice provost for innovation and entrepreneurship at Duke University, will lead the fund. Calling it a moment of opportunity, Frey says "I think the trend in entrepreneurship is not so much let’s do another thing in Silicon Valley, let’s do another thing in Boston… those have already happened." He adds "where things are going to grow are in areas like Indianapolis and this region, where the entrepreneurial community is just getting started."
In a Studio(i) interview, Frey talked about the arm and parallels he sees between Indianapolis and Raleigh-Durham.
The launch of HG Ventures includes wow-factor beyond getting Frey to lead the effort. The Heritage Group sees a cutting edge, 50,000 square-foot innovation and collaboration hub on the Indianapolis northwest side as an important part of the new innovation initiative. Half of the space houses the Heritage Research Group, a cutting edge home for world class labs and dozens of researchers exploring innovation and new technologies for Heritage Group portfolio companies. The other half of the complex, which opened last October, is incubation space for new companies. "It is one of the most amazing facilities I have seen in the country, that is built to support entrepreneurial culture and innovation," said Frey.
Founded in 1930, The Heritage Group is a privately-held group of companies in sectors including construction and materials, environmental services, specialty chemicals and energy and refining. The company has operations in North America, Europe and Asia.
While HG Ventures will invest in early and growth-stage companies in its core sectors, Frey says the arm will also look at opportunities with companies of any size in other segments of the economy as well.