A Houston-based venture capital firm that has raised more than $100 million for its newest fund is to announce Monday that it has opened an office in Ann Arbor and recruited Adrian Fortino, formerly a vice president at Invest Detroit, to run it.

Blair Garrou, a partner and co-founder of, said that his firm has big plans for the Michigan office. He said that not only will the new fund invest in local early-stage high-tech companies, but it plans to move here other Midwest companies in which it invests.

Garrou said Mercury looked hard at opening an office in Chicago but chose Ann Arbor because "there's so much development talent in Michigan. We couldn't match that in Chicago. As we invest in Midwest companies, we'll want to move some of them to Ann Arbor. And we've already got a company in Texas; we are looking at opening a secondary office in Ann Arbor."

He said there is a depth of engineering, computer science and machine-learning talent in the area, bolstered by graduates of the. One of Mercury's main areas of investment is biotech, and there are numerous contract research organizations in Ann Arbor that were founded by formeremployees after it closed its local operations in 2008.

Garrou said Mercury, which was founded in 2005 to provide seed- and early-stage funding to tech companies and now has more than $225 million under management, expects to finish fundraising on its third fund,, in the next two or three weeks.

"I don't know what our final close will be, but it will be more than $100 million, and that's the fund Adrian will be investing out of," he said.

Fortino was managing director of both of Invest Detroit's funds, thefund, which typically invests $50,000 in seed money for startups, and the newerfund, which invests larger amounts in early-stage tech companies.

The First Step fund was launched in 2010 with a $5 million grant from the. The Detroit Innovate fund was launched last year with $5 million from the NEI, has a commitment of $2.5 million from theand hopes investments from other foundations will allow it to raise at least $15 million.

Fortino will continue as a member of the investment committee for the First Step fund. He has been a serial entrepreneur himself, co-founding three companies —, a now-defunct UM spinoff that provided fleet-management software; Ann Arbor-based, which manages customer reward programs; and San Francisco-based, a ride-share company.

Fortino has equity stakes in both FlockTag and Sidecar, which made headlines in September when it announced a funding round of $15 million, which included an investment byfounder Richard Branson. The company previously had raised $20 million in VC funding.

Garrou said he got to know Fortino while vetting area startups. Mercury and the First Step fund provided seed funding to Ann Arbor-based, founded in 2012 to commercialize a process for making high-performance ceramics at low temperatures.

Covaron won $25,000 at the 2012 Accelerate Michigan Innovation contest and last year won $100,000 as the event's runner-up. Mercury has sold its stake in the company and currently has two area portfolio companies —, an Ann Arbor-based provider of cloud-based data analytics, and, an Ann Arbor-based provider of biological products for gene researchers.

"After working with Adrian, we had identified him as a potential partner. We saw how he operated, and it made sense to reach out to him when we decided to add a sixth partner," said Garrou.

Fortino won't just manage Ann Arbor operations. He said he will help build up Mercury's national practice in industrial technologies and physical sciences.

An engineer, he previously was manager of powertrain development with Van Buren Township-based, a tier-one auto supplier.

"I had a wonderful time at Invest Detroit. I loved the group, but the opportunity to joining a mid-continent firm closing on a round of more than $100 million was inviting. They're some of the best VCs I've come across," said Fortino.

"We invested $3 million in Mercury's second fund in 2010, and we invested $5 million in the third fund last year, so we're big fans," said Chris Rizik, CEO and fund manager of the Ann Arbor-based, a fund-of-funds associated with

"When we did our due diligence in Mercury, what came out uniformly is that companies really like having them as a partner," said Rizik.

"Mercury invests in areas other companies don't often look at. They'll look at advanced materials and industrial technologies, and they're willing to look at very early-stage companies and invest seed money to help a company move on and see where it can go to," he said.