ArchiMed raises EUR 650m in less than two months

The GP said the fund was raised entirely virtually, in less than two months, and no placement agent was used. Clifford Chance acted as legal adviser.

MED III was oversubscribed, receiving hard commitments in excess of EUR 1.3bn, according to ArchiMed. The original target was EUR 500m.

The fund is a significant step up from its predecessor; ArchiMed hit the EUR 315m hard-cap for MED II in 2017 after four months on the road. Launched with a EUR 250m target, the vehicle was already more than double the size of MED I, which held a final close on EUR 146m in June 2015. 

"Investors pushed us towards a significantly higher hard-cap," ArchiMed founder and managing partner Denis Ribon said. "But we wanted to stay true to the fund's focus on smaller firms, so we capped this where it makes sense for the strategy. Investment discipline is key to our success and we've sized MED III to provide a seamless transition from MED II, based on a very strong deal pipeline."

Prior to the close of MED III, the firm was managing around EUR 2bn in assets across four funds: small-cap-focused MED I and MED II; gene- and cell-therapy-dedicated PolyMED; and mid-cap-focused MED Platform I, which closed on €1bn in August 2020, exceeding its €800m target.

While the GP's MED I and MED II funds focus on small-cap deals, MED Platform I is its largest vehicle raised to date and targets mid-cap healthcare companies valued at more than EUR 100m. The fund is now 70% deployed.

MED II is invested in 11 companies, while MED I backed nine businesses and has already returned more than four times invested captial.

ArchiMed is not the only GP to have found success carving a niche by focusing purely on healthcare buyout investments. Most recently, GHO Capital Partners held a final close for GHO Capital III on EUR 2bn. The fund exceeded its EUR 1.25bn target and was registered in May 2021. The vehicle's predecessor, GHO Capital II, held a final close in November 2019 on EUR 975m, surpassing its EUR 800m target.

In the UK, Apposite Capital is heading for a final close for Apposite Healthcare Fund III in the autumn, as reported. The fund was registered in December 2020 and has already made its first deal: the GP announced the acquisition of Switzerland-based contract research organisation 1Med in May 2021, as reported. Apposite held a final close for its predecessor vehicle, Apposite Healthcare Fund II, in June 2018 on £144.5m.

Lower down the value scale, SHS held a final close for SHS V Fonds in July 2019 on €130m. The GP will be back to market this year to raise a new vehicle, as reported.

Investors
More than 95% of MED II investors re-upped, according to ArchiMed. A quarter of MED III investors hail from the US, with 50% being in EU countries and the remainder from European countries outside the EU.

Of the fund's backers, some 85% are institutional investors, mostly endowments, foundations, insurance companies and pension funds – the remaining 15% are family offices.

Investments
MED III will target 12-14 majority-control investments in healthcare companies with annual revenues of EUR 10m-100m, based in Europe and North America. Specific sectors of focus include biopharma and related services, medtech, life sciences, diagnostics, consumer health and healthcare IT.

The GP said it would continue to use "limited" leverage in its investments to prioritise growth. 

People
ArchiMed – Denis Ribon (founder, managing partner).

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