Performance Analysis of Life Sciences Private Equity Funds

by Hayley Wong

  • 09 Mar 2012
  • PE

Preqin’s Performance Analyst module has performance data for 102 private equity funds which have a main focus on the life sciences industry. Examining the strategies used by theses funds shows the majority are venture vehicles and 6% are fund of funds vehicles. Seventy-eight percent of the funds focus on investing in North America, 17% have a Europe-focused strategy and the remaining 5% will make life sciences investments outside the US and Europe.

Analysing the net IRRs for these funds show the median is 4%, the top quartile boundary is 12.8% and the bottom quartile boundary is -5.8%. The median multiple calculated for these funds is 1.11x. Examining the performance further for funds with a vintage between 2003 and 2007, the lowest median net IRR, -10.3%, is reported by vintage 2005 funds and the highest median net IRR is yielded by vintage 2004 funds with 1.7%. Funds with a vintage of 2009 produce a median net IRR of -8.8%, it is important to bear in mind that funds of this vintage are still at the early stages of investing and so their returns are likely to change over time.

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