Gilde Healthcare closes Fund III on €145m

The Dutch firm, which had a re-up rate of above 80%, will continue to target deals on both sides of the Atlantic.

Gilde Healthcare Partners, a Netherlands-based sector-focused firm, has closed its latest fund on its €145 million target after nearly two years in market.

The re-up rate among existing LPs was above 80 percent, Pieter van de Meer, a managing director at the firm, told Private Equity International. The firm attracted primarily European investors including Philips, Rabobank and the European Investment Fund.

Gilde Healthcare III, which didn’t use a placement agent, held a first close in the beginning of 2012, having collected “just under €100 million”, Van der Meer said.

The vehicle targets minority investments up to €15 million in the healthcare technology space, both in the US and Europe. “Our philosophy is to support American-based companies in their expansion efforts to Europe and vice versa,” he said. Prior to raising its latest fund, a €145 million 2007-vintage which is now fully invested, Gilde Healthcare hired two investment professionals in Cambridge in the US, Van der Meer said. The firm has been targeting investments in the US since 2006 from its European office.

Deal flow is “historically high”, according to Van der Meer. “We have increased our deal flow opportunities by setting up a team in the US. We see more deals because we are there. Additionally, capital is scarcer. Not every fund manager succeeds in raising capital right now, so there’s less competition for us when it comes to deals,” he said.

The underlying drivers for the healthcare technology sector remains stable, he argued. “Due to the ageing population and improved healthcare options, people live longer. Illnesses like diabetes and cancer have become chronic conditions. This has led to increased needs for all different types of care. In addition, increased obesity levels also put pressure on healthcare systems both in the US and in some parts of Europe.”

Gilde Healthcare has so far made four investments from this fund: Sapiens, Inovalabs, Iwalk and Definiens. It plans to make approximately 12 investments from the vehicle.

The firm is also currently investing Gilde Healthcare Service I, which closed on €53 million in 2010. From this vehicle, it targets minority investments in the healthcare services space in the lower mid-market in the Benelux. That fund is approximately two-thirds invested, and the firm is expected to come to market to raise a successor fund by the end of next year.

Gilde Healthcare was originally part of Gilde, one of the oldest private equity firms in the Netherlands, founded in 1982. In recent years, the firm has split into three independent firms: Gilde Healthcare, Gilde Buy Out Partners and Gilde Equity Management.

Gilde Healthcare II, a €145 million 2007-vintage, was the first fund the healthcare team had raised independently. Prior to that, it invested from Gilde Healthcare I, which raised approximately €100 million in 2001.