ArchiMed launches second mid-cap fund

Founding partner Denis Ribon would not comment on the fund's target, but said it would be larger than its predecessor, which held a final close in August 2020 on EUR 1bn. Med Platform II will aim to make 8-12 investments in the mid-cap market.

The GP is sticking to its portfolio mix of around 20-30% for biopharma, 20-30% for medtech, 15-20% for consumer health and the same again for life sciences tools, plus 10-15% for diagnostics and healthcare IT.

Around two-thirds of ArchiMed's investments are in Europe, with the remainder in North America.

Med Platform I invested EUR 50m-500m in companies worth at least EUR 100m.

Investors
Ribon said he expects a strong interest in investors based on the success of earlier ArchiMed small-cap funds.

The GPs first fund, Med I, is the "best-performing buyout fund at a global level for the 2014 vintage", Ribon claimed.

"It was already at 4x distribution to paid-in (DPI), but recently signed some exits so is going up to 4.5x," adding that it is close to achieving a 7x multiple of invested capital (MOIC) and that it completed one full exit in 2021 with more to come in 2022.

Its successor, Med II, has a DPI at 0.6x and a MOIC above 2.5x, he added, saying that it's a top decile performer.

On the mid-cap front, Ribon said: "Med Platform I has seen several significant partial liquidity events driven by companies' outperformance, making the fund a top decile performer also with >2x MOIC already. There are more liquidity events to occur in 2022."

Exits
Ribon says that ArchiMed has already had six full exits across all of the funds and, in the past year, seven partial liquidity events. "Our companies are outperforming, which allows us to go for a refinancing."

The most recent example is US-based consumables manufacturer Ad-Tech, which it acquired from the Med II fund in November 2020. "With improved terms and a lower interest charge than the original acquisition debt, the refinancing returns more than a third of Ad-Tech's purchase price to Med II's investors," ArchiMed said in a statement at the time.

Ribon would not comment on how many exits the GP expects this year but says it will be a mix of full exits and partial liquidity.

He added: "So far, all of our exits were strategic exits, but this won't always be the case."

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