H.I.G. Seeks $250M for Life Sciences

H.I.G. Capital is in the market with a new venture capital fund focused exclusively on life sciences companies, with the goal of raising $250 million in commitments, according to a source familiar with the effort.

The Miami-based firm began fund-raising several months ago, the source says.

The firm had allocated about half of its 5-year-old $300 million second fund to life sciences investing, says Managing Director Aaron Davidson. But now H.I.G. feels that the strategy deserves a dedicated vehicle, says the source.

The third fund will focus primarily on companies developing therapeutic drugs or medical devices across sectors and stages, Davidson says. Specifically, he says H.I.G. will focus on “capital-efficient businesses with large market opportunities in underserved geographies, and products with shorter development.”

Davidson declined to comment on the fund’s target or progress, citing regulatory restrictions.

H.I.G. BioVentures is a newly formed affiliate of H.I.G. Capital. It’s not clear if the parent firm will raise a separate and new general VC fund, since the firm’s past two VC funds also invested in media, semiconductor, software and wireless companies.

When asked for clarification on whether H.I.G. will continue to make non-life sciences investments, a firm spokesperson wrote in an email: “H.I.G. BioVentures II is a focused life sciences fund and extension from prior venture funds that invested in life sciences and technology companies. We have other current funds/strategies, including LBO and distressed debt funds that invest across a broad range of industries.”

On the buyouts side, H.I.G. raised $3 billion in 2008 for H.I.G. Bayside Debt & LBO Fund II. It also manages an $818 million distressed debt fund, called HIG Europe Capital Partners, which it raised in 2007, according to Thomson Reuters (publisher of VCJ). —Erin GriffithDEALWATCH: Five recent investments by H.I.G. Capital

Company_DescriptionCare Dynamix Inc._Vaccination provider for U.S companies.

Funambol Inc._Open source mobile application servers.

Nexidia Inc._Scalable audio mining and speech analytic software.

Quinnova Pharmaceuticals Inc._Specialty pharmaceuticals.

Triad Digital Media LLC_Online advertising services.

Note: Investments made from August through December 2009. Source: Thomson Reuters