EQT Life Sciences surpasses hard-cap to reach €260m for inaugural dementia fund

The life sciences unit increased its original €175m hard-cap to allow for more investment into the portfolio companies it seeks to back.

EQT’s life sciences unit has surpassed the target for its inaugural fund focused on developing breakthrough drug therapies and medical technologies relating to dementia.

EQT Life Sciences’ LSP Dementia Fund surpassed both its €100 million target and its original €175 million hard-cap, holding a final close this month on €260 million, Philip Scheltens, partner and head of the vehicle, and René Kuijten, partner and head of EQT Life Sciences, told Private Equity International.

Investors in the fund include the Alzheimer’s Association, the European Investment Fund, several global pharmaceutical companies and multiple insurance companies. The firm decided to increase its original hard-cap following backing from the EIF, Kuijten said.

There is a large amount of dealflow when it comes to companies tackling the spectrum of neurodegenerative diseases and the area is undercapitalised, Kuijten said. He explained to PEI that, by increasing the fund size, investors are able to have exactly the same portfolio as they would have had at the original €175 million hard-cap, but with more investment per company. This allows EQT Life Sciences to have a stronger lead role and negotiating position.

“We could prove that because we already had… three or four [investments] at the time where we only took small stakes and where we could have done [a] double stake [size],” Kuijten said. “Many of [the investors] want to make a dent in the venture field, so if you can raise €260 million instead of €175 million, they’re all very happy.”

There are 54 million patients with dementia globally – a number which is predicted to triple by 2050 without the time and investment required to battle the disease, according to a statement from EQT referencing a policy brief from Alzheimer’s Disease International. Investment in research and development for dementia is substantially lower compared with other major healthcare challenges such as cancer, HIV/AIDS and cardiovascular disease, the statement added.

LSP Dementia Fund held a first close in December 2020, just months after Scheltens, professor emeritus at Amsterdam University Medical Center, joined legacy LSP, now EQT Life Sciences. The vehicle has held a number of closes since then.

The vehicle, which anticipates making 10 to 15 investments, has already backed Nasdaq-listed NewAmsterdam Pharma, Denmark-headquartered Muna Therapeutics, the UK’s AviadoBio, Belgium-headquartered Nobi and US-headquartered QurAlis.

The vehicle has a mandate from the EIF to invest 65 percent of the capital in companies with a presence in Europe and can also invest internationally, Scheltens said.

EQT acquired Dutch venture capital firm LSP in March 2022 and rebranded the firm to EQT Life Sciences. Just prior to this, in February of the same year, the firm said it had held the final close for its latest flagship, Life Sciences Partners VII, on €1 billion. This marked a significant jump on its 2018-vintage predecessor, which raised $600 million, according to PEI data.

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