Veteran VC firm decides to divide

March 15, 2011, 6:24 PM UTC

Venture capital firm Sigma Partners is splitting up.

Fortune has learned that the firm’s East Coast and West Coast teams each are in the market with new, independent funds. The two groups will continue to co-manage legacy investments, and will not be under any future geographical restrictions (although they each plan to focus close to home).

Sigma has been in business for over 25 years, and raised $500 million for its eighth fund in 2007. Its hits include Electronic Arts (initial investment in 1998) and EqualLogic (acquired by Dell for nearly $1.4billion).

I’m told that the East Coast group – led by Bob Davoli – is seeking around $250 million. No target word on the West Coasters – led by Greg Gretsch and Fahri Diner — although it’s probably around the same.

A source also insists that the split is amicable, although there obviously will be competition as each side vies for fund commitments from many of Sigma’s existing limited partners.

It will be very interesting to see how this plays out. I cannot think of another venerable VC firm that basically split in half based on geography.

St. Paul Venture Capital became Split Rock and Vesbridge, but that was because their sole LP (insurance company St. Paul) wanted to spin them out (Vesbridge later failed). Burr, Egan, Deleage & Co. ultimately became Alta Partners and Alta Communications, but that split was along industry-specific lines (Partners on life sciences, C0mmunications on telecom/tech). Am I missing one?

No comment from Gretch or Davoli.