AP Fonden 6 and Danske merge life sciences funds

The two have joined forces as the sector consolidates to create one of Scandinavia’s largest life science funds.

AP Fonden 6 and Danske Bank have merged their life science operations to create Scandinavian Life Science Venture (SLSV), a SKr2bn (E200m) fund that targets life sciences and related investments in Scandinavia.

For AP-Fonden 6 and Danske Bank, the deal marks a continuation of their alliance, which began with the formation of Medicon Valley Capital (MVC) in 1999.

The new fund will comprise 18 investments from AP Fonden 6 and six from MVC, with a total value of SKr800m. AP Fonden 6 and Danske Bank will also contribute a further SKr1.2bn, which will be allocated between follow-on investments (SKr400m) and new investments (SKr800m).

Scandinavian Life Science Venture will initially operate out of offices in Copenhagen, Lund and Gothenburg – but with the whole Nordic region as its market. MVC managing director Henrik Lawaetz, who will be a founding partner of the new fund, said he believed it important to continue to act locally. “We are following a pattern demonstrated in the US that has shown that local funds tend to have more success than broader funds.”

Lawaetz added that consolidation in the Scandinavian life sciences sector was necessary and that the firm had been looking at this for some time. He also said that further consolidation was probable. “It is possible that we will look for a third partner, although any association would have to be with a firm that had already completed fundraising.”

The fund will make investments of between SKr10-80m in life science companies in the region. According to Lawaetz, the first investments will probably be made in the autumn, following the integration of the two firm’s pipeline opportunities. “We believe that there are some good opportunities available at the moment and valuations are either at, or towards the bottom of, the price range.”