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Successful fundraise driven by positive trends in the industry and outperformance by LSP
Amsterdam, Munich, 12 November 2018 - LSP, the specialist life sciences and health care investment group, has raised more than €750 million for three different funds over the past ten months to invest in innovative drug development and medical technology companies across Europe. This result constitutes a record fundraise in European life sciences, consolidating LSP’s leading position.
2018 has been a landmark year for fundraising in the European life sciences industry. Over €3 billion has been raised to date, with institutions being drawn to the non-cyclical nature of the strategy, recognising the enormous potential of the life sciences industry in Europe and increasingly focusing on the social impact of their investments.
LSP has developed over 120 companies since its inception in 1998, of which many have brought innovative drugs or medical technologies to the patient community. The firm has assets under management of over €2 billion in nine funds and has offices in Amsterdam, Munich and Boston.
“We have been delighted by the support we have received from both new and existing investors,” said Dr René Kuijten, managing partner of LSP. “I believe that our fundraising success is based on a number of factors: the increased efficiency and maturity of the European VC ecosystem; a shift in big pharma and medtech from an internal R&D to an acquisition-based model; and the performance of our funds”.
The European biotech and medical technology market has matured significantly over the last decade, becoming increasingly efficient at commercialising scientific innovation. The number of repeat entrepreneurs is a testament to this, with about one third of LSP’s new investments coming from entrepreneurs with whom the firm has had previous successes.
In its home markets of the Benelux and German speaking regions of Europe, LSP has played a key role in harnessing support for life science ventures. Earlier this year, LSP's Rudy Dekeyser and René Kuijten catalysed the foundation of the Oncode Institute in the Netherlands, which brings together 600 of the best oncology researchers in one single institute. Supported by the Dutch government, Dutch Cancer Society and nine Dutch research institutes, Oncode helps commercialise breakthrough discoveries and get them to patients faster.
Big pharma companies have shifted their business model, no longer relying solely on internal R&D to develop new products but rather acquiring VC backed start-ups and listed small-cap companies at a later stage. Today, at least two-thirds of new drugs coming on to market originate from universities and life sciences start-ups. LSP portfolio companies currently have over 100 products in patient trials, a pipeline larger than many of the leading pharma groups like Pfizer, Sanofi, GSK and Novartis.
LSP analyses more than 1,000 investment opportunities per year and thus can be very selective. The firm has built a stable team that has been together for an average of 15 years. LSP’s collegiate approach is designed to allow for growing companies and delivering new drugs and technologies to patients whilst generating superior returns for investors. Recent successes include argenx (auto-immune diseases; current value $3.5 billion); Neuravi (minimal invasive stroke treatment, successfully sold to J&J); and Amarin (cardiovascular disease; current value over $7 billion). In total, over the past five years alone, LSP has sold 23 companies.
Existing and new investors in LSP's strategies include blue-chip insurance companies, pension funds, government funds, asset managers, family offices and, in particular, big pharma. For example, LSP 6 has been selected by Bristol-Myers Squibb to be its venture group of choice in Europe, following similar LSP relationships with GSK and Pfizer. Working closely with a pharma company provides LSP with deep insight into pharma’s thinking, enhancing its understanding of which companies are most likely to be attractive M&A targets.
About the LSP funds
LSP has three different strategies targeting different segments of the life sciences and health care industry under one roof: separate funds that reinforce each other and make use of the comprehensive experience of all LSP professionals. The three funds actively investing are:
- LSP 6, the flagship closed-end private equity fund investing in early-to late stage drug and technology development. In a record time the fund has raised over €410 million, up 65% from its predecessor fund LSP 5 (€250 million). The fund is still open for new qualifying investors.
- LSP Health Economics Fund 2 (LSP HEF 2), a closed-end private equity fund investing in late-stage medical technology companies with products that improve quality of care and help control health care spending. The fund had its final close in December 2017, raising €280 million, far above its target of €150 million and 150% larger than LSP HEF 1 (€110 million).
- LSP Life Sciences Fund (Bloomberg ticker: LSP NA; ISIN Code: NL0009756394), an open-end fund quoted on Euronext and investing in publicly listed small- to midcap healthcare companies. The capital under management for this fund and for several private mandates with the same strategy, approaches €200 million; assets under management have nearly doubled in the past year.
For more information please contact:
Dr. René R. Kuijten
Managing Partner LSP
Securities offered by investment funds sponsored by LSP will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction or pursuant to an exemption from such registration requirements.
One of the investors in LSP 6 and LSP HEF 2 is the European Investment Fund (EIF) that benefits from the financial backing of the European Union under the European Fund for Strategic Investments (“EFSI”) set up under the Investment Plan for Europe. The purpose of EFSI is to help support financing and implementing productive investments in the European Union and to ensure increased access to financing. The capital invested by EIF origins from the European Recovery Programme (ERP) – EIF Facility, the EIB-Risk Capital Resources mandate – EIF facility and the EIF – EIB SME Funds Facility.