Sofinnova closes largest European life sciences fund in years

Kimberly Romaine
12 November 2012

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Sofinnova Partners is due to announce a final close on its seventh life sciences fund in the second week of December, unquote” has learned. Kimberly Romaine reports

Sofinnova VII has hit its €240m target already, having successfully raised their new life sciences fund during a tough period for European venture fundraising, an investor in the fund has told unquote".

The sum will make it the largest dedicated life sciences fund raised outside the US since this manager's predecessor fund, which raised €260m in 2009. At that time, Sofinnova still had technology and clean energy as part of their investment strategy for Sofinnova VI. Since then, however, there has been a strategy shift to focus purely on life sciences – an area that the current team has been investing in for over 20 years. Hence, Sofinnova VII will be purely life sciences focused.

The success comes at the end of a strong year for European venture. Earlier this year, Sofinnova sold BlueKiwi Atos SA Group. The exit came just weeks after Sofinnova floated DBV Technologies on NYSE Euronext Paris, though all the cash raised in the oversubscribed listing was reinjected into the business. The GP exited six businesses in 2010 and 2011, with notable disposals including Corevalve (9x), Stentys (4.7x), Novexel (3x) and Preglem (5.4x).

It's not just Sofinnova hard on the exit trail: a number of VCs are recording very strong realisations, including DN Capital, which earlier this year sold Apsmart to Thomson Reuters in a deal that saw the vendor reap a reputed 20x money.

The exits are bearing fruit, with a number of successful fund closes notched up by the industry. Advent Venture Partners' impressive run saw LPs add a third to Advent's 2010 £75m fund, bringing it to £101m. The additional capital was raised from one new LP – whose interest catalysed the re-opening of the vehicle – as well as commitment increases from existing investors. The increase is notable in that it was Advent's first dedicated life sciences fund and originally took 15 months to raise in what the GP described as a "challenging" environment.

This summer, Index Ventures closed its sixth technology fund on €350m, bringing the GP's fundraising effort over the past 12 months to a total of €1bn. Index raised the oversubscribed fund within two weeks. That fund was closed three months after its €150m life sciences vehicle was raised, and seven months after its Index Ventures Growth Fund II reached its €500m target.

This year has also seen Scottish Equity Partners (SEP) raise two funds worth nearly £300m: SEP IV raised £200m at the end of 2011 while £95m was raised for its Environmental Energies Fund at the same time. Creandum held a first close of €92.5m in April and has a target of €150m.

According to unquote" data, investors in Sofinnova's previous funds include Capital Dynamics, CDC Entreprises, CNP Assurances,the European Investment Fund, JP Morgan Asset Management, Industriens Pension, Partners Group and Skandia Life Insurance Company.