Women in VC: Turenne Santé's Chaoui on new healthcare growth strategy and social impact

NHC is a growth fund and was launched last September with a EUR 100m-EUR 150m target.

The vehicle, which is certified as Article 9 according to the EU Sustainable Finance Disclosure Regulation (SFDR), has already collected one third of its target size, with a final close expected by year-end or mid-2024 at the latest, she said. "Fundraises are currently taking longer to close due to rising interest rates that makes insurers less inclined to invest in private equity and more inclined to invest in rate derivative products," Chaoui added.

NHC's limited partners (LPs) are mainly French institutional investors, including insurers and health funds, along with several European investors. Some executives with sector expertise have also invested in the fund, she said.

The vehicle plans to invest in 10-15 companies, with a first investment pencilled in for 2024, she said.

Investment strategy
Next Health Capital will focus on healthcare companies that are not profitable yet but which already generate revenue or aim to in the next 12 months, Chaoui said. It will look into sectors including diagnosis, online health, medical aids and biopharmaceutical platforms dedicated to messenger RNA and Car-T cells, she added.

The vehicle will mainly target France, including businesses located outside the Paris region, with up to 15% of its investments to be located elsewhere in Europe, she said.

NHC's average ticket is expected to be around up to EUR 2m-EUR 3m, with a maximum investment of EUR 10m-EUR 15m per company, she said. It could deploy up to EUR 50m per company with several co-investors, she added.

It usually invests with venture capital funds including French peers Financière Arbevel and Kurma Partners, alongside whom the fund participated in a EUR 11m funding round for medtech expert Germitec last April.

NHC's investment period will span up to seven years and the fund will invest in exchange for a minority stake and a seat at the board, she said. It aims for 15-20% IRR and above 2x net money multiple when exiting a company.

Social impact
Turenne Santé has carried out ESG audits with sustainability advisor Sirsa since 2019, Chaoui said. It also offers quarterly ESG reporting to its LPs.

Béatrice Denys, Chaoui's predecessor, had set up a foundation to identify potential targets for seed investments in the cardiac health market before she passed away in 2012. The programme is still active, with EUR 50,000-EUR 100,000 awarded every year to entrepreneurs seeking funding for their additional proof of concept, she said. Around 10-15% of Next Health Capital's carried interest will be donated to the foundation.

The foundation has supported companies including Acticor Biotech, a clinical-stage biotechnology firm developing an innovative treatment for acute thrombotic diseases including ischemic stroke. It listed in 2021, raising EUR 15.5m in the process, as reported.

It also provided a subsidy to pre-clinical stage transplant rejection treatment developer AbolerIS Pharma, rare skeletal disease therapy developer InnoSkel, and oncology therapy specialist StromaCare. The businesses later welcomed Turenne Groupe as a minority investor via its Relyens Innovation Santé fund (formerly known as Sham Innovation Santé) in 2020 and 2022.

Turenne Santé's investment team has six women and six men, a parity achieved without hiring quotas, which is down to the fact that there are more female practitioners in the health market than in other PE sectors, she said. Her investment team is also diverse in regard to nationality and social standing, which is often missing in PE funds, Chaoui said. She also attends events organised by Rothschild & Co's Women Business Network as part of her efforts to boost diversity in the industry.

EUR 300m under management
Turenne Santé has EUR 300m under management and 32 companies in its portfolio, she said. In addition to its new growth-stage strategy, the firm invests from seed funding rounds to more mature leveraged buy-outs across its investment strategies, she added.

It launched its first vehicle, LBO fund Capital Santé 1, in 2013. It collected EUR 62m and invested in 14 companies. The fund has completed 11 exits, with the last ones expected in the next 18 months, Chaoui said.

In 2019, Turenne Santé established Capital Santé 2, which secured EUR 187m. It carried out 11 deals and aims to complete four to five more investments by 2025. A third edition of the Capital Santé vintage is expected to be launched next year, she added.

Turenne Santé also manages Relyens Innovation Santé on behalf of French insurance group Relyens. The evergreen fund has EUR 60m under management, she said.

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• Topics
• GPs
• Venture
• France
• Healthcare
• Women in Private Equity
• France
• Impact