New York–based OrbiMed Advisors, a healthcare-focused investment management firm, has closed its second Asia-focused fund, OrbiMed Asia Partners II, on $325 million, above the fund’s original target of $300 million.
The fund is considerably larger than the firm’s first Asia vehicle, a 2008-vintage which closed above target on $185 million. New York-based partner Carter Neild told Private Equity International that around two-thirds of the capital in the second fund came from returning investors.
Formal marketing for the fund was launched in the first quarter of 2013, and it attracted two cornerstone investors: the Asian Development Bank, which made a $60 million commitment to the fund in May, and Bank of America Merrill Lynch, which has committed an undisclosed amount.
The GP commitment to the fund is “in excess” of 2 percent.
The successful fundraise reflects the “increasing appetite and receptivity in the LP world” for healthcare and life sciences investments, Neild said. “OrbiMed is really unique in having created a pan-Asia healthcare-focused private equity platform,” he explained, adding that the majority of the firm’s competitors in the region are generalists.
OrbiMed, which has around a dozen full-time employees split between Shanghai and Mumbai, expects to invest the vast majority of the fund – around 90 percent – in China and India.
Neild insisted that the larger fund did not denote a change in strategy; rather, it is a “right-sizing” of the fund, as the previous vehicle was “subscale.” The firm still expects to invest in between 15 and 20 companies, just as it did with the first fund, but more capital will allow OrbiMed to take “more meaningful ownership positions,” Neild said.
OrbiMed hopes to benefit from increasing consumption and utilisation of healthcare overall in Asia. In North America and Europe, where the firm also invests using separate funds, OrbiMed tends to focus on companies that are discovering novel therapies and treatments, while in Asia it focuses on companies providing services or products that are part of treatments.
OrbiMed has made two investments from OrbiMed Asia Partners II already, both for undisclosed amounts. The first was in the Delhi-based Asian Institute of Medical Sciences, a multi-specialty tertiary care hospital with a focus on oncology. The investment will allow the hospital to expand further. The fund has also invested in China-based specialty pharmaceutical company GC-Rise, which focuses on women’s and children’s health products. Two more deals are pending, according to Neild.