Ebb & Flow
Publicly quoted European biotechs, beaten down by tough capital market conditions, will take some comfort from last week's news that the Netherlands' largest pension group is committed to increasing its focus on small-cap life science plays. With E217 billion ($338.4 billion) in assets under management, APG Investments, a Dutch pension services business, has turned to Life Sciences Partners Group to assist it in identifying investment opportunities.
"LSP will act as a gatekeeper for APG as if it was an LP in one or our funds. We will be responsible for providing ready-to-go investment opportunities in a pro-active manner that APG will subsequently invest in," Mark Wegter, LSP general partner, told Ebb & Flow.
According to Martin Eijgenhuisjen, APG's senior healthcare portfolio manager, the pension company sees opportunities within publicly listed European small and mid-cap biotechs, but recognized that it needed specialized expertise to make investments.
Neither party is revealing how much money might be made available, nor any details of the relationship's financial arrangements, beyond saying that they are in line with industry standards. "They should provide us with an incentive to build a balanced biotech portfolio of listed stocks that should provide venture-like returns," said Wegter.
"Given the profile of many of the European small and mid-cap biotechs, we will apply a private equity investment approach to public equity investing. This means that a significant portion of our investments will be in new offerings, backing undervalued companies to achieve their long term development goals," he told Ebb & Flow.
LSP has already completed one undisclosed transaction and Wegter says other deals are in the pipeline.
A dedicated LSP team, led by Wegter and LSP partner Joep Muijrers, will focus on companies active in therapeutic development, medical devices, and molecular diagnostics, at any stage of development. The team will not restrict itself in terms of minimum market caps nor liquidity.
LSP is discussing similar arrangements with a number of other large long-term