Forbion raises combined EUR 1.35bn for venture and growth funds

"We saw strong support from existing investors," Dirk Kersten, the partner who manages the growth fund, told Unquote. LPs recognise that there is a shortage of capital for mature biotech amid an IPO drought and an environment in which early-stage companies are now reaching maturity, he added.

The biotech sector in general is also non-cyclical, many therapies can be annually repriced based on inflation, and has low leverage, said Sander Slootweg, Forbion's managing partner. "The pharmaceutical industry is also always looking to add new products; we have in effect become an externalised R&D pipeline," he added.

Forbion Ventures Fund VI invests in early-stage life sciences companies, while Forbion Growth Opportunities II backs later-stage businesses. Growth Opportunities II held a EUR 470m first close in the summer of last year, aiming at the time for a summer final close.

The venture fund's predecessor, Forbion V, closed in December 2020 on EUR 460m, while the growth fund's predecessor, Forbion Growth Opportunities I, closed on EUR 360m in April 2021, both reaching their hard-cap.

The two funds are the sponsor's largest fundraises to date and nearly double its assets under management to EUR 3bn. Both are registered as Article 8 funds and Forbion is exploring whether to raise future Article 9 funds depending on the reporting burden on its portfolio companies.

Investors
Forbion Ventures Fund VI saw a strong re-up rate by existing investors, the GP said in a statement, and at the same time has attracted several new investors including Dutch pension funds PME and PMT, Loyola University of Chicago, the Scott Trust Endowment Ltd and Pictet Alternative Advisors.

Growth Opportunities II attracted several new institutional investors, including Amundi and Legal & General Capital, which join Dutch pension funds PME and PMT, Pantheon and Eli Lilly and Company.

Investments
The venture fund aims to make around 15 investments and the growth fund around 12 investments, with both deploying tickets up to EUR 75m. As assets reach a mid-level of maturity, the funds also have the ability to syndicate a ticket.

The growth fund is scouting for deals with at least Phase 2 clinical data that demonstrate clinical efficacy and patient safety, while the venture fund is focused more on company building.

The venture fund even has the ability to found or co-found new companies, said Slootweg. These can be incubated around new science and technologies; teams that have already built other successful companies; or non-core assets divested from pharmaceutical companies that need to be developed.

At a subsector level, both funds are agnostic, although it has strong expertise in cardiovascular, RNA technologies, gene editing and antibodies. Oncology is becoming a slightly more crowded field so it will still continue to deploy there but at a slightly slower pace.

Both will be 75% Europe-focused, with the remainder in North America. It is also not ruling out Canada, said Kersten. Much like in Europe, the valuations are attractive there, given that they are around 40% lower than the US, with the cost of running companies around 50% lower.

Around 80% of the capital will be reserved for private companies, with around 20% to invest in listed equities where the asset is heavily undervalued but there is an opportunity for value creation. "We will also take a board seat and have a 2-3-4 year horizon on the outlook, so we are a long-term investor," said Slootweg.

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