Life Science Partners fund nears target

In what it described as a tough fundraising environment, the Amsterdam and Munich-based VC has added CSFB as an investor and is closing in on a €125 million target.

European venture capital group Life Sciences Partners (LSP) has announced that Credit Suisse First Boston has joined as a new limited partner in its third fund, LSP III, which it expects to close in the next few months.
CSFB has joined a number of new investors in the vehicle, including Swiss Re Private Equity Holding and Proventure. LSP said that a number of investors in previous LSP funds have committed to LSP III, including the European Investment Fund (EIF), Residex and DSM. LPs in the fund are based in the Benelux, Germany, Switzerland, Finland and the US.
LSP III will invest in 15 to 20 companies in the life science sector in the Benelux and Germany, as well as the rest of Europe.

It’s been pretty tough to market the fund. We’re seeing that LPs are more interested in mid-market to large funds rather than venture capital.

Martin Kleijwegt, managing partner, Life Science Partners

Martin Kleijwegt, managing partner of the Amsterdam and Munich-based Life Science Partners, said in an interview that LSP III has thus far raised approximately €80 million ($97 million), having held a first close on €65 million in June 2005. He added that the vehicle is expected to reach a final close on its target of €125 million in the first quarter of 2006.
Attracting funds for life science venture investments has proven a hard sell in the current market environment said Kleijwegt. “It’s been pretty tough to market the fund,” he said. “We’re seeing that LPs are more interested in mid-market to large funds rather than venture capital. The fact that we can raise this fund is pretty good as a number of groups haven’t been able to raise money over the last two years.”
While interested limited partners have been difficult to find, deal flow hasn’t. “The market for doing investments in new portfolio companies is excellent right now,” added Kleijwegt.
LSP III already has four later-stage investments in its portfolio: Octoplus, Idea AG, Zealand Pharma and Jerini, which floated on the Frankfurt stock exchange last October. Kleijwegt said that a fifth investment is due to complete in the next few days.