LSP has raised a $600 million (€529 million) fund to invest in European life science companies. The investment vehicle, which LSP claims is the largest of its type in Europe, is bigger than the VC shop’s three previous life science funds combined.
In 1998, LSP tapped investors around its base in the Netherlands for €55 million to set up its first life science fund. Subsequent funds pulled in progressively larger amounts, barring a dip around the time of the financial crisis, and attracted the support of companies including GlaxoSmithKline and Pfizer as successful exits such as the €250 million sale of Okairos gave LSP a reputation for backing winners.
Now, LSP has used that reputation to reel in a monster fund by European standards. At $600 million, the sixth fund is around four-fifths of the size of its five predecessors combined, giving LSP far more firepower than ever before. The second biggest fund was $284 million at today’s exchange rate.
The fund closed at its hard cap, one-third above the original target, but the extra spending power has not persuaded LSP to diverge from the strategy that made its earlier funds successful. That means LSP 6 will invest in 15 to 18 predominantly private European life science companies that are trying to translate scientific advances into new products.
As LSP goes about the tasks of finding, backing and supporting its startups, Bristol Myers Squibb and Otsuka Pharmaceutical will be among the organizations with front-row seats. Both the biopharma companies invested in LSP 6, joining with the European Investment Fund and unnamed pension funds, insurance companies and other groups to power the fund past its initial target.
The strong interest in LSP 6 follows the closing of other big funds by some of the VC shop’s European peers. Last year, Wellington raised a fund that was almost 150% bigger than its predecessor, and the team at Medicxi put together a €400 million fund in just six weeks. The previous year, Forbion closed a €360 million fund.
Even after the surge in the size of funds raised by leading European VCs there remains less money available than in the U.S. As LSP Managing Partner René Kuijten sees it, that disparity means there are opportunities for his firm.
“The number of high-quality life sciences innovations in Europe is similar to the United States but there is 5x less capital available to back these innovators and entrepreneurs. With our new fund we can significantly contribute to the growth of our industry and ensure that European innovations get to patients faster’’ Kuijten said in a statement.