A.M. Pappas Nets $20 Million First Close on Inaugural Fund

DURHAM, N.C. – A.M. Pappas & Associates, a life sciences investment and consulting firm, held a $20 million initial close on its maiden vehicle in late November.

Tech AMP International, launched last summer, will focus on early-stage life sciences, medical devices and information technology companies with therapeutic implications. The fund is A.M. Pappas’ first formal vehicle – previously, the firm had invested on a deal-by-deal basis.

The firm at press time was seriously evaluating three deals and had plans to begin investing immediately, said a source close to the fund raising.

Limited partners in the first close consisted of “strategic investors” with an interest in the fund’s life science focus, including Duke University Management Co., West Coast biotechnology company Alza Corp. and Alexandria Real Estate Equities, a life sciences facility finance company.

Limited partners could not be reached for comment by press time.

The close was the first in a “series of closings over the coming months,” the source said. A.M. Pappas will now concentrate its efforts on “mainstream financial and institutional investors” in the United States and Europe as it heads toward a final close in the second quarter. Although Tech AMP’s final target was undisclosed, the source added that it would be “substantially in excess of the first close.” The vehicle’s target has been estimated to be as much as $100 million (VCJ, October 1998, page 17).

Some 80% of the fund will be invested in the U.S. and Canada, with the remainder going to the United Kingdom and Germany, the source said.

Tech AMP will be managed by A.M. Pappas Founder and President Art Pappas, Vice President of Staff Operations Ford Worthy, CIO Peter York, Senior Vice President Medical Director Bill McCulloch and Director of European operations Mike Leyland. The vehicle’s terms were undisclosed.