MTIP holds USD 250m final close for second fund

The fund had a EUR 200m target, which it has surpassed. It held a first close in April 2021 on EUR 130m, as reported.

Dechert and Equiom are providing advice on the fund. The firm's predecessor vehicle held a final close on its hard-cap of CHF 60m in April 2017.

MTIP is headquartered in Basel and is continuing to increase its team size, managing partner Christoph Kausch said, with further new team members expected to join in Q1 2021.

MTIP Fund II is classified as an Article 9 impact fund under the SFDR, according to a statement, with Kausch noting that it is one of the first in its sector to achieve this classification. "ESG is naturally important in this space, with the emphasis on how to improve access to healthcare," he added. "We are PRI signatories and this is embedded in our due diligence. Environmental issues are less relevant in this sector, but social, and especially governance, are important. We identify the most important topics to be addressed as prerequisites following our investment and then we regularly monitor this."

Investors
The LP base is made up of around 50% institutional investors, 20% corporates, and 30% family offices and private individuals. Institutional investors in the fund include pension funds, hospitals and foundations, according to a statement. The fund had a 100% re-up rate, with the majority increasing their ticket size, although the majority of its capital comes from new LPs, given the smaller size of Fund I.

Investments
The fund can provide up to EUR 25m in funding per company, providing initial investments of EUR 10m-15m. The vehicle primarily invests in Europe, including Israel, and can selectively invest further afield. It has backed five companies and expects to invest in 10 in total over the next two to three years, with a fund term of eight years.

"We expect to execute around four new investments next year," Kausch told Unquote. "We are actively doing due diligence on three companies and we have a very rich pipeline."

Activity in the healthcare technology sector is being driven significantly by the coronavirus pandemic, Kausch noted. "Probably the only good thing about the coronavirus pandemic is that it increased the awareness of the need for digitalisation in the healthcare industry. The development of AI means that we have technology in place that allows for new possibilities to better help patients. Mental health solutions and faster triage via symptom checkers are areas that are much better developed now and reduce the cost to healthcare systems."

Looking ahead to exits, the GP expects to make one or two deals from Fund I in 2022, Kausch said. "The market is not overheated, but it is very hot, so a lot of deals could now happen faster than initially expected."

The heated market brings its own challenges, however. "I don't see any challenges on dealflow, but I think there will be a challenge in terms of valuation, given that the market is getting more competitive, especially with the entrance of US funds and strategic corporations investing in the space," Kausch told Unquote. "So we need to continue to be very fast and diligent in sourcing deals, executing and providing additional value for our portfolio companies, while being fully conscious of valuations. We still need to invest in a range that makes sense in the long term."

People
MTIP – Christoph Kausch (managing partner); David Germonpré (partner); Erich Platzer, Willi Miesch, Marco Gadola (healthcare partners).

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