Ebb & Flow

For the second time this month, a sizeable first-time fund with a seasoned team has closed above its initial target. Last week, Cowen Healthcare Royalty Partners closed its first fund at more than $500 million.

In early July,Longitude Capital, spun out of Pequot Capital, closed a $325 million fund, above its $250 million target (see BioCentury, July 14).

CHRP reached a funding cap it had negotiated with its lead investors. The initial target was $350 million. The firm launched in January 2007 with the three founders, Todd Davis, Clarke Futch and Gregory Brown, all coming from positions as partners at Paul Capital(see BioCentury, Jan. 8, 2007).

The firm will focus on commercial and near-commercial healthcare products and companies through the purchase of existing royalties, the creation of royalties on revenue streams, as well as the combination of royalties with equity or debt securities. It expects each investment to be $20-$100 million.

Davis told Ebb & Flow he expects the fund to be split about

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