LSP closes Health Economics Fund on €112m

The fund launched in February 2012 and simultaneously held its first close with a large cornerstone investment, meaning HEF could immediately begin seeking investments.

The fund made its first investment in US company Illuminoss Medical. HEF co-led the business's $28m series-C funding round in September 2012.

The fund has a lifetime of 10 years with a five-year investment period. Terms and conditions for the vehicle are described as European standard by LSP HEF managing partner Rudy Dekeyser.

Investors
Prior to its first close, HEF received a €50m commitment from cornerstone investor Achmea, a Dutch healthcare insurance company. Another major investor in HEF is Dutch health insurer Menzis.

LSP began to target health insurance companies and family offices, the latter of which is described by Dekeyser as currently being very important to private equity, after interest from typical institutional investors, such as banks and pension funds, began to wane. Dekeyser said that the fundraising process began to accelerate quickly in the last three to four months, which allowed the fund to close above target.

The fund has also received commitments from French and German health insurers, as well as several large family offices and asset managers. Around €40m of the total amount was raised from family offices. The vehicle included a GP contribution.

The LPs for HEF were entirely from Europe, said Dekeyser, although the fund will invest in the US.

Investments
The fund will invest in European and US later-stage healthcare companies that have either commercialised their products or are very close to doing so.

HEF is different from LSP's other funds in that it will not invest in drug developing companies. It will focus its investments on companies that develop medical devices, diagnostics or healthcare-related IT solutions.

Around two thirds of the fund will be invested in European companies, with the balance going to US businesses. An investment in a European company is expected to be announced by LSP in the next couple of months.

People
Rudy Dekeyser is the managing partner for LSP HEF.

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