Wellington Partners: 210 million euros for new life sciences fund

Munich — Welling­ton Part­ners closed its fifth “Life Science Fund V” with 210 million euros at the end of July. Twice the size of its prede­ces­sor fund, making it the largest Liefe Science fund ever raised by the company. The invest­ment stra­tegy remains in place: Poten­tial port­fo­lio compa­nies are start-ups from the biotech and medtech sectors.

The first closing of Life Science Fund IV took place at the end of 2012 in the amount of 70 million euros. In a diffi­cult fund­rai­sing envi­ron­ment, the final closing in 2013 then reached 85 million euros. — Rainer Stroh­men­ger, Mana­ging Part­ner at Welling­ton Part­ners, and his team targe­ted drug-deve­­lo­­ping biotech­no­logy compa­nies with Life Science Fund IV only in excep­tio­nal cases. The focus was prima­rily on medi­cal tech­no­logy and diagno­stics companies.

Whereas at that time around EUR 7 million to EUR 10 million were earmarked for invest­ment in a company, the spread for the succes­sor may be wider: EUR 2 million to EUR 20 million was issued as a target corri­dor at the end of July. In total, the port­fo­lio is to be expan­ded by 15 to 20 compa­nies. Geogra­phi­cally, the focus is as before on German-spea­king Europe. Howe­ver, invest­ments in compa­nies from other regi­ons of the world are not excluded. The focus will again be some­what broa­dened: New biotech plat­form tech­no­lo­gies, new thera­peu­tics and diagno­stics, e‑health busi­ness models and medi­cal tech­no­logy ideas are all being considered.

For the current fund, Stroh­men­ger and Mana­ging Part­ner Regina Hodits (photo ) attrac­ted new inves­tors such as KfW Kapi­tal, Talanx and UTIMCO, the A & M invest­ment company of the Univer­sity of Texas (USA). Many inves­tors who had parti­ci­pa­ted in the old funds also moved back in — inclu­ding a number of family offices, the Euro­pean Invest­ment Fund and the Euro­pean Invest­ment Bank.

“We see clear oppor­tu­ni­ties for above-average returns through invest­ments in pionee­ring Euro­pean life scien­ces compa­nies. Given the world-leading inno­va­tion ecosys­tem in Europe, espe­ci­ally in the German-spea­king region, coupled with a lack of quali­fied finan­cial inves­tors in the Euro­pean life scien­ces sector, we have alre­ady iden­ti­fied promi­sing invest­ment oppor­tu­ni­ties,” Hodits said.

“German insti­tu­tio­nal inves­tors such as insu­rance compa­nies are also incre­asingly inves­t­ing in venture capi­tal funds, and in the life scien­ces and health­care sectors as well, as eviden­ced by Talanx’s invest­ment in our new fund, for exam­ple. In Europe, and espe­ci­ally in Germany, there are a large number of attrac­tive invest­ment oppor­tu­ni­ties in the life scien­ces sector for which there is still not enough capi­tal. Ther­e­fore, exis­ting German funds can invest signi­fi­cantly more money in the local market than is available today, and there is defi­ni­tely poten­tial for new funds in some areas such as digi­tal health.”

Welling­ton Part­ners’ successful exits include invest­ments in Acte­l­ion (sale to John­son & John­son), Rigon­tec (sale to MSD), Syme­tis (sale to Boston Scien­ti­fic) and Defi­ni­ens, an infor­ma­tics specia­list for tissue sample analy­sis. Among the most recent invest­ments are Iomx Thera­peu­tics in Martins­ried (see |transkript.de), Sphin­go­tec (see |transkript.de) and Adre­no­med (see |transkript.de) in Hennigs­dorf as well as Snipr Biome in Copen­ha­gen (see Euro­pean Biotechnology).