MPM closes $900M Health Fund III

The US-German healthcare investor has closed its third fund on $900m, making it one of the largest funds ever raised in the sector.

( US-based healthcare sector investment house MPM Capital has held a final close on $900m for its global venture capital fund MPM BioVentures III, the largest fund raised this year dedicated solely to the healthcare sector.


MPM will invest BioVentures III in unlisted biotechnology, drug development and medical technology companies at all stages of development across Europe, the US, and Asia. The firm may also participate in private equity offerings of publicly traded companies. MPM will look to invest from $5m to $60m per company, with a preferred investment size of $15m to $25m.


“Even with European market challenges and falling valuations, consolidation and rationalisation within the European pharma companies represent a significant venture capital opportunity,” MPM general partner Michael Steinmetz said in the statement. “Consolidation in big pharma has allowed us to create biotech companies that upon inception look like a fully enabled therapeutic division of a true pharmaceutical company.”


Robert Liptak, principal and chief financial officer based in MPM’s Boston office, has been promoted to general partner. Liptak, who retains his responsibilities as chief financial officer, was chief financial officer of the Geometry Group, a diversified financial service holding company with $2bn of assets under management prior to joining MPM last year.


Joining the Munich office of MPM as venture partner is Markus Hosang, formerly of Hoffmann La Roche, who will focus on pharmaceutical spin-out opportunities and direct the Munich office activities. Prior to joining MPM, Hosang was at F. Hoffmann-La Roche in Basel, Switzerland and in the U.S. since 1983.


Promoted to principal are Todd Foley, William Greene, and Ilan Zipkin, all three of whom had been Associates in the MPM BioVentures group. Zipkin also works with the MPM BioEquities fund team. Foley is part of MPM’s Boston office while Zipkin and Greene are based in San Francisco.


The close of MPM BioVentures III brings total funds under active management by the firm, which has offices in Boston, San Francisco and Munich, to $2.1bn.


Fully committed existing funds include the $230m MPM BioVentures I family of funds, comprised of BB BioVentures and MPM BioVentures Parallel Fund, which closed in 1997 and 1998, respectively, and have 80 per cent of the investments in biotechnology and 20 per cent in medical devices and e-health, and the $600m MPM BioVentures II fund, which closed in 2000. Both funds included a broad base of large institutional investors in the US and Europe, including pension funds, university endowments, foundations, insurance companies and funds of funds. The MPM Capital BioVentures portfolio currently comprises 56 companies.


In January, MPM Capital closed its MPM BioEquities Fund, a hedge fund that invests primarily in public biotech securities and to a lesser extent crossover late-stage private financings, on more than $450m.