SAN FRANSICSO – Alta Partners in early May launched two funds, Alta California Partners III LP and Alta BioPharma Partners II LP, targeted at $300 million and $200 million, respectively, and the firm expects to hold a first close on both funds by the end of June, said Daniel Janney, a general partner at the firm.
Alta California Partners III will back approximately 35 to 40 early-stage information technology and life sciences companies, investing about $8 million in each over the course of several rounds, Janney said. The Alta BioPharma Partners II will invest in about 20 to 25 private and public late-stage life sciences companies, committing about $10 million to each company over time, he said. The firm engages in deals mainly on the West Coast, but is willing to invest elsewhere if opportunities present themselves.
The purpose of having two funds is to provide limited partners with options, Janney said. “It allows limiteds who want a pure play to have that pure play.” Additionally, the separation makes sense internally because each fund is unique in its method of deal sourcing, execution and management time, he said.
The firm’s previous diversified vehicle, the $225 million Alta California Partners II LP, is nearly 70% invested, and the $170 million Alta BioPharma Partners LP is approaching 90% invested. When completely committed, the funds will together have about 53 companies in the portfolio, Janney said.
Alta’s diversified portfolio includes ImageX.com Inc., a business-to-business Internet producer of printed business materials, Ellie Mae, a provider of e-products and services for the mortgage community, and software developer Be Inc. The life sciences portfolio includes ILEX Oncology Inc., developer of drugs to prevent and treat cancer, Connectics Corp., a developer and marketer rheumatology and dermatology products, and The Medicines Co., which acquires, develops and commercializes late-stage pharmaceutical products.
The firm expects most of its limited partners to return for the new funds, but intends to accept investments from some newcomers, he said. Previous investors include California Public Employees’ Retirement System, Bank of America, Chase Manhattan Bank, Corning Pension, Rhode Island Employees’ Retirement System, Mellon Bank, Hamilton Lane Advisors, Pacific Corporate Group, Finova Capital Corp., TIAA-CREF and Unisys Pension Plan.
Five of the firm’s general partners, Jean Deleage, Garrett Gruener, Guy Nohra, Marino Polestra and Janney, invest the diversified fund.
General Partners Farah Champsi, Alix Marduel and Deleage focus on the biotech vehicle.
Alta Partners plans to add two more general partners to the group, one IT-specialist and one health-care expert, both of whom will join Alta California Partners III, said Janney, who invests and manages the diversified funds.