Private Equity Funds in Market Focused on Life Sciences – September 2012

by John Mather

  • 27 Sep 2012
  • PE

Life sciences includes several branches of science, including biology, medicine, and ecology, among others. These important scientific industries have emerged as a burgeoning private equity sector, with a variety of funds entering the market looking to invest in firms that are developing ideas in biotechnology, pharmaceuticals, and biomedical technologies.

Preqin Investor Network currently tracks 103 private equity vehicles worldwide seeking capital to gain exposure to the life sciences sector. These 103 vehicles have an aggregate target size of over $3.2bn and have an average size of $305mn. Four private equity vehicles on the road can be defined as pure life sciences, as they concentrate exclusively on life sciences investments, while the remaining funds look to invest in the life sciences sector in addition to other unrelated industries as part of a wider, more generalist strategy.

Examining life sciences private equity fundraising by regional focus exposes the even distribution of investments in the sector globally. Thirty-seven percent of private equity vehicles seeking to gain some exposure to life sciences investments have a main focus on the US, while 27% target investment opportunities in Europe and 36% focus on Rest of World.

Private equity funds in market focused on life sciences are predominantly comprised of venture capital funds, which constitute 62% of the 103 vehicles on the road. These venture capital vehicles seeking exposure to the life sciences industry represent 17% of the current venture capital fundraising market.  Despite the prominence of venture capital vehicles that seek exposure to this industry, this investment strategy is not followed by the largest three vehicles on the road. The largest vehicle in market targeting life sciences among other industry sectors is Warburg Pincus Private Equity XI, a balanced fund seeking $12bn. This is followed by Genstar Capital Partners VI, a buyout fund looking to raise $1bn, and AIF Capital Asia IV, a growth fund targeting $750mn.

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