Private Equity News & Analysis

Kleiner Perkins exec eyes $150m healthcare fund – Exclusive

James Huang, managing partner at KPCB China, has formed Panacea Venture, focusing on early stage healthcare investments globally.

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A senior executive from Kleiner Perkins Caufield & Byers China has formed his own firm and is launching a fund focusing on early stage healthcare investments, Private Equity International has learned.

James Huang, a managing partner at KPCB China, has launched Panacea Venture, which focuses on China investments, according to two sources familiar with the matter. Panacea began gearing up for the fundraise in early September and will seek $150 million for Panacea Venture Healthcare I which will invest in healthcare groups with China links, one of the sources said.

Huang will continue as managing partner at KPCB China and oversee its portfolio until 2022.

Fund I has a $200 million hard-cap and aims to incubate seven companies across all sub-segments of healthcare, especially those with the most disruptive technology.

PEI understands Atlantic Pacific Capital is the placement agent for Panacea Venture.

Huang has already formed a team of seven investment professionals for Panacea and wants to hire up to five more professionals before the fund holds its final close, the source said. PEI understands KPCB China Partner Hai Mi, who focuses on the firm’s life sciences practice, has also joined the firm.

Some existing KPCB China limited partners are backing Panacea, the source said.

The Rockefeller Foundation, Robert Wood Johnson Foundation, University of Michigan and Swedish pension fund AP Fonden 2 are investors in KPCB China’s funds. The 2011-vintage China Fund II collected around $220 million and the 2007-vintage Fund I raised 600 million yuan ($90 million; €75 million), according to PEI data.

Panacea is targeting a “very high fund multiple and net internal rate of return” because of its “unique fund strategy of incubating companies, launching them and bringing them to a point of liquidity through M&A or an initial public offering”, the source said. Panacea expects 2018 to be a good vintage year since valuations of healthcare investments have come down compared with the previous years, the source added.

Panacea and Atlantic Pacific both declined to comment.

– Adam Le contributed to this report.