Forbion exceeds initial cap with €360m final close

The fund officially launched in May 2018 and held a first close on €270m in July. The vehicle was originally targeting a €250m final close and had set its hard-cap at €350m.

Forbion IV significantly surpasses the size of its predecessor Forbion III, which closed on €183m in April 2016, just short of its €200m target. The third generation vehicle has realised four investments, including the sale of Rigontec to MSD and the IPO of Replimune on Nasdaq in July 2018.

"No fundraise comes without its own small challenges," said Forbion managing partner Sander Slootweg, "but our significant increase in fund size is a result of exceptional support from LPs who, like us, understand that there remains a clear undersupply of capital in European life sciences."

Cebile Capital acted as fundraising adviser for the raise, and its managing partner, Sunaina Sinha, credits the fundraising strategy for the successful close: "What Forbion got right in this fundraise was to include a lengthy period of pre-marketing to ensure they spoke to most LPs well ahead of the actual raise. The pre-marketing period helped LPs get familiar with the Forbion story, build a relationship with the key partners and ensure they had enough time to complete their due diligence in time for a final close in record time and above hard-cap".

The new vehicle, almost double its predecessor, will give the VC more flexibility when choosing between stand-alone and syndicated investments. "The sector has very high barriers of entry due to the deep-rooted life sciences expertise required to successfully identify opportunities in the market and execute on them," said Slootweg.

Investors
Forbion said it had received support from both new and existing investors to reach its first close. "We've seen engagement and interest from across the spectrum of alternative asset investors, from governmental bodies through pension funds and blue-chip insurance companies. VC is now a firmly established asset class and Forbion's long track record has certainly been instrumental in the success we've had on the road to date," said Slootweg.

The split between new and existing LPs is roughly 50-50. New investors include UK-based Pantheon, Dutch institutions ASR Insurances and the TNO Pension Fund, and Nordic investors Formuesforvaltning and KLP. Existing LPs European Investment Fund (EIF) and development bank KfW also returned in the new fund.

EIF made a €10m commitment to Forbion III, which also received backing from Norwegian insurance company Kommunal Lanspensionskasse, according to Unquote Data.

Investments
The fund targets life sciences companies that are active in the biotechnology and pharmaceutical space developing novel drugs, medical devices and diagnostics.

The new vehicle will aim to create a portfolio of 15 companies, five of which will be founded or co-founded by Forbion – so-called "build" opportunities – and 10 of which will be already established businesses, deemed "growth" companies.

Forbion already has a track record of executing on build opportunities, including NorthSea Therapeutics, Staten Biotech, Catalan and Replimune. It will own a stake of between 35-70% in these types of businesses through Forbion IV.

Forbion IV, like its predecessor, will primarily focus on opportunities in the EU – including the UK – with the remainder of the fund targeting opportunities mainly in North America. The vehicle has an 80-20 bias towards Europe. In North America, it usually invests alongside co-investment partners, which it may bring in to its deals in Europe. These firms include Versant Ventures, OrbiMed, Omega Capital, New Science Ventures, Atlas Venture and Foresite Capital.

The new vehicle will target substantial initial stakes, looking to take lead positions. It will target initial stakes of 20-50% in the growth companies it backs, and each portfolio company will have access to capital up to a maximum of 15% of the fund size.

People
Forbion – Sander Slootweg (managing partner, co-founder).

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