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Healthcare-Focused Venture Capital Funds in Market

by Jessica Duong

  • 21 Dec 2011
  • PE

Being an arena of great innovation and research-led development, the healthcare sector is a popular target for venture capital investments. Preqin’s Funds in Market product shows that there are 165 venture funds currently seeking capital which have an industry focus that includes healthcare. Collectively, these funds are targeting aggregate capital commitments of over USD 22 billion. Eighty-three of these vehicles have a pure healthcare industry focus, targeting companies that work specifically within the following sectors: biomedical, biotechnology, healthcare, healthcare IT, life sciences, medical devices, instruments and technologies, pharmaceuticals and predictive medicine. Nineteen percent of these funds are focused on Europe, and 13% on Asia and Rest of World. However, the vast majority of these funds (68%) are focused on North America. Collectively, these pure healthcare focused venture funds are targeting over USD 11 billion.

The three largest venture funds in market that are solely focused on healthcare are all targeting USD 500 million in investor commitments. These are Burrill Life Sciences Capital Fund IV, Cowen Healthcare Royalty Partners II and NovaQuest Capital Management. Although all investing solely in the healthcare industry and all mainly focusing on the North American continent, their individual focuses are quite varied, which highlights the range of investment opportunities that lie within the health sector for fund managers.

Burrill Life Sciences Capital Fund IV, managed by Burrill & Company, invests in therapeutics, diagnostics, devices, tools and technology and bio-nanotech in the US. The fund also targets companies working in healthcare delivery, particularly digital health companies, healthcare informatics and services as well as in bio-energy, biofuels, industrial biotech, agricultural biotech and animal health biotech. Cowen Capital Partners’ Cowen Healthcare Royalty Partners II fund invests in healthcare and therapeutic companies across the US and EU, and NovaQuest Capital Management invests heavily in early stage US drug companies, large pharmaceutical companies and late stage trials.

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