RALEIGH – Sovereign’s Capital, headed by former Bandwidth CEO, cofounder and board chair Henry Kaestner, has raised $20.2 million of its third fund targeted at $50 million, according to a filing with the U.S. Securities and Exchange Commission.

Sovereign’s is headquartered in the San Francisco Bay area but has its back office and operations center in Raleigh.

Kaestner, who recently resigned from the Bandwidth board, is managing principal at Sovereign’s, which invested in 35 early and growth stage companies from its first two funds.

Bandwidth.com was the 4th fastest growing privately held company in the country from 2003 through 2007, a position it achieved without acquisition or institutional funding.

Prior to co-founding Bandwidth.com, Kaestner founded Chapel Hill Brokers (a predecessor to ICAP Energy), an institutional energy derivatives broker that became the top ranked electricity broker in the country.

Interested in values-driven management teams

According to its web site, the firm invests in growth-stage companies operating in expanding markets, with $500,000 to $10,000,000 in revenue.

In addition to a clear path to profitability and exit, it says it is most interested in investing in excellent, values-driven management teams motivated by visions that go beyond out-sized financial returns.

Sovereign says that “Our investment focus is centered on markets familiar to the investment team – namely healthcare, tech, and tech-enabled consumer products. Our team invests in both the U.S. as well as Indonesia and Singapore, and our investment team members are based in Washington DC, Silicon Valley, and Jakarta.”

It adds, “The team, which is primarily comprised of professionals with operational leadership experience, provides strategic counsel and operational expertise on an ongoing basis to help portfolio companies in local, regional and global marketplaces.”

The fund has invested in Bandwidth, Liquidia and 410 Medical in North Carolina. In addition to the U.S., it also invests in Southeast Asia. Its focus is on  B2C technology, tech-enabled consumer goods and services, B2B technology, healthcare IT, and medical devices.

Previously on WRAL TechWire:

Tax benefit lifts Bandwidth earnings above expectations; cofounder exits board