‘I've rarely seen our life science team so excited’

Was the recent fundraising as straightforward as it sounds? What areas were of most concern to existing and potential investors?
Most of our LPs have been with us for several funds and are familiar with our philosophy, investments and detailed track record. Because there was little change in our team or strategy and we raised the fund almost exclusively from existing investors, the process was indeed efficient. However, there was a fair number of in-person meetings during which the focus was largely on portfolio development. The primary concerns were portfolio management in a severe recession and the outlook for material distributions.

Do you think European venture gets a fair hearing in the LP community tHESE DAYS?
Yes, we do think that European venture is taken seriously. Few LPs view European venture as separate from the global venture capital asset class and returns are consequently compared on a global basis. The critical questions are about critical mass, i.e. once the venture capital allocations are decided, are there enough top-quartile prospects in Europe to justify the investment required to assess opportunities in the European market? And, for overseas-based LPs, should this effort be handled from the US or staffed locally? The jury appears split on these questions.

What's your view of prospects for buying and selling businesses over the nEXT FEW YEARS?
The prospects for new investments are very strong. Venture funding levels have already come down significantly and we can expect reduced competition among start-ups. Talent is more available and investment in people, advertising, facilities and equipment are cost-effective. As a result, funded start-ups that do not need capital in the short-term and are selling products and services in tune with a recessionary environment have a great opportunity. In terms of selling businesses, times are obviously difficult because of reduced asset prices and the strategic priorities of buyers which typically do not currently include acquisitions. We can expect M&A activity to pick up once corporations feel confident in their ability to weather the storm and will look to take advantage of a buyer's market. A buoyant IPO market is still some way out.

What are the keys to successful venture investing in an environment like today's?
The fundamentals remain the same, i.e. backing gifted and driven entrepreneurs that are leveraging innovation to create highly valuable businesses over a five- to seven-year period. The current environment requires a strong focus on value for money, efficiency, bottom-line impact, short payback etc. We're looking for entrepreneurs who have integrated these elements into their thinking and the DNA of their enterprise.

Name one or two emerging technologies that excite you most because oF THEIR POTENTIAL
At this stage, I must answer “Oxyrens”, which is a small molecule drug developed by Normoxys (a portfolio company) that increase the regulated oxygen release capacity of red blood cells. I mention it because I have rarely seen our life science team so excited by pre-clinical results and because potential clinical indications could encompass some of the biggest killers of our time including cancer, cardiovascular diseases and Alzheimer's disease.