Apollo buys minority stake in life sciences investor Sofinnova

Under the strategic partnership, Apollo has acquired 20% of Sofinnova and will also commit up to EUR 1bn to future fundraising, including any future strategies that the two firms may co-develop. 

Apollo, which has around USD 500bn AUM, now joins EQT and Carlyle in buying stakes in European venture capital funds focused on life sciences.

Unlike the buyouts of LSP and Abingworth, Sofinnova was not interested in a full sale and instead initiated the minority stake sale by approaching various funds to find a minority partner, Graziano Seghezzi, managing partner at Sofinnova told Unquote. 

"We are the largest independent platform in Europe and wanted to remain as such," he said. "The coming together of private equity and venture capital is a very important movement for our industry, to grow we wanted to be in sync with that macro movement."

Alongside the new capital, Sofinnova will also be able to access Apollo's LP base to expand its fundraising, Seghezzi said, adding that the firm's existing LPs are supportive of the partnership.

The VC closed its tenth flagship fund, Sofinnova Capital X, in September last year at EUR 472m that invests around seed to Series A, and has four other active strategies that cover the full risk spectrum. In total, it has over EUR 2.5bn AUM. 

Sofinnova is head strong in retaining its culture and independence and will also remain headquartered in Paris, Seghezzi said.

"We are not going to change our strategy. We wanted to retain our business model, our business plan, and our operations. We will continue to build on our strategy."

For Apollo, like other large ticket GPs moving into the space, the rationale is to gain quick access to a complex sector. The sponsor told Sofinnova that it would take them ten years to build such a strategy internally. 

Upon close, Neil Mehta, partner and Global Head of Strategy at Apollo, will join Sofinnova's board.

The GP said in a statement that Sofinnova adds to Apollo's ecosystem of investment managers focused on deep tech, fintech, digital assets and other specialised, higher growth categories where the firm does not have a historic footprint.

For other GPs looking to join the trend, there are now few large specialised life sciences investors without backing. One of the biggest, Jeito Capital, recently told Unquote that it is focused on remaining independent. 

The transaction is expected to close in the second half of 2022. 

Advisors

Sofinnova - Triago (strategic); Dechert (legal)

Apollo - Guggenheim Partners (M&A); Paul, Weiss (legal); Gide Loyrette Nouel (legal)

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• Topics
• Healthcare
• GPs
• Buyouts
• Venture
• Sofinnova Partners
• Apollo Investment Corporation