benchmarkeuropelogo.jpgBenchmark Europe, one of Europe’s largest venture capital firms, has split from its U.S. counterpart, and changed its name to Balderton Capital.

The move is significant because it shows the European outpost of the U.S. firm has become successful enough to do business under its own name. Benchmark Europe raised a $500 million fund in December, is one of the largest VC firms on the continent and is starting to see its first returns: One of its investments, Yingli Solar, filed to go public yesterday on the NYSE. MySQL, another investment, plans also to go public soon.

The move is also notable because it shows how the venture model continues to tend toward local manager control. DFJ, Kleiner Perkins, Sequoia Capital and others have all expanded internationally — and will have to deal with the same challenge of managing relationships with their foreign counterparts. Indeed, DFJ saw serious defections in China two years ago.

Benchmark U.S., which has always had an equal partner structure internally, compared to most firms where there is significant hierarchy. Kevin Harvey, of Benchmark here in Menlo Park, Calif., said the intent from the beginning was that Benchmark Europe would have local autonomy, and it has been run that way. Local managers with autonomy are more efficient and make better decisions, Harvey said.

In 2000, to get Benchmark Europe started, the U.S. team had helped the European team firm with brand affiliation. With hits like eBay, Benchmark U.S. had the reputation that could help Benchmark Europe access deals. In return, Benchmark’s U.S. partners enjoyed significant ownership of “carry,” or profits, in Benchmark Europe’s funds. That carry diminished with Benchmark Europe’s second fund, and has been eradicated entirely for Benchmark Europe’s $500 million third fund raised in Dec. That fund will be called Balderton I, as of today.

The change has happened quickly. Balderton doesn’t even have a Web site yet.

Balterton has about $1.5 billion under management, and has invested in more than 70 companies, which also include Bebo, Betfair, Alphyra and Setanta. Barry Maloney, general partner of Balderton, tells VentureBeat that the partners on both sides have invested in each other’s funds. The only difference is the change in carry.

Another benefit is that Balderton can now encourage the entrepreneurs it backs to seek capital from Benchmark in the U.S., without those entrepreneurs getting concerned about giving too much of a stake to a single fund. Maloney said Balderton will treat Benchmark U.S. as a “most favored nation” when its companies seek to raise money in the U.S. MySQL is an example of a company where both sides invested in the same company.

There will be no change in the Israeli team’s name or organization, though Benchmark’s Harvey said the long-term goal is for that team to become an independent brand too.

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