BOSTON – The Schroder Ventures International Life Sciences Fund II in late September reached a $280 million wrap on its core fund and in early October held a $30 million close on three related side funds.
Fund II had a $200 million target and a $250 million cap, but the firm negotiated with limited partners to raise the ceiling, said Schroder Managing Director James Garvey.
As implied by the fund’s lengthy name, SVILSF II will back life sciences companies domestically and abroad. With more capital to put to work than originally intended, Garvey expects the fund to invest in larger deals and probably a few more buyouts. At the same time, Schroder can invest in smaller syndicates and put more capital into follow-on rounds, he said.
About one-third of SVILSF II will be devoted to buyouts, an increase from the one quarter that its predecessor, 1994’s $100 million Schroder Ventures International Life Sciences Fund, devoted to buyouts, Garvey said. The remaining capital will be split among private health-care services and health-care technology companies.
The fund will be managed by 14 investment professionals, half in London, half in Boston, including a partner-level person slated to join the London group in January. Garvey declined to name the newcomer or describe his background, other than to say he would work on buyouts.
SVILSF II will invest in all stages of deals, from seed to buyouts, and about 60% of the capital will be put to work in the United States. Another 30% to 40% will be invested in Europe and as much as 10% may go to Asia, Garvey said. Schroder will seek companies with international components, such as clinical trials conducted in Europe. The firm will help portfolio companies establish international activities if they are not already in place.
Schroder will invest in a broad range of life-sciences companies, including those concerned with agriculture and the environment.
While the first international life sciences fund backed 31 companies, Garvey expects the new vehicle to invest in 40 enterprises. Four deals from SVILSF II worth a total of $20 million had been completed by press time.
Schroder International Life Sciences Fund was posting gross returns of about 40% at press time, with a net return in the 20s, Garvey said. He declined to name investors in the new fund.