Longitude raises $525m for third fund

Menlo Park-based venture capital firm Longitude Capital has closed on a new biotech and life sciences fund.

Longitude Capital has closed its third venture capital fund Longitude Venture Partners III (LVP3) on $525 million, above its $450 million target, according to a statement from the firm from earlier this month. 

Consistent with its predecessor funds, LVP3 will invest in private and public biotechnology and medical technology companies across all stages of development in North America. The third fund is expected to commit an average of $15 million to $25 million per investment in approximately 25 companies. 

Los Angeles Fire & Police Pension System committed $15 million to the fund earlier this month. The pension fund also committed $10 million to LVP2. 

LVP2, held a final close on $385 million, slightly above its $375 million target in 2012. Limited partners also included Maryland State Retirement and Pension System , Employees Retirement System of Texas and Danish pension fund Industriens Pension , among others.

LVP, the firm's first fund and a 2008-vintage vehicle, held a close on $325 million above its $250 million target. The fund had a $24.67 percent net internal rate of return, as of December 2014, according to Colorado Public Employees' Retirement System , an investor in the fund.

Longitude has secured over $1.2 billion in aggregate capital commitments, including fundraising for the third fund. The firm has invested in 42 portfolio companies, across its first two funds, according to a statement from the firm. 

“Our venture growth strategy in life sciences is rooted in building a balanced portfolio primarily of clinical-stage and commercial-stage companies at what we believe are favorable valuations that can generate attractive expected returns within three to five years,” said Juliet Bakker, co-founder and managing director of Longitude Capital, in the statement.

Menlo Park-based Longitude Capital was founded in 2005 and has $1.2 billion assets under management. The firm is a spinout from hedge fund Pequot Capital, which became defunct in 2009.