How Wellington closed its largest fund yet at €210M

String of exits, well-defined European focus helped Wellington Partners close its fifth and largest fund

Takeouts of portfolio companies Rigontec and Symetis, coupled with a focus on biotechs in Germany, Austria and Switzerland, helped Wellington Partners raise its largest fund to date.

Wellington announced Wednesday the close of Wellington Partners Life Science Fund V at €210 million ($233.5 million), well above the fund’s target of €150 million ($166.8 million). The fund is more than double the size of Wellington’s previous fund, WPLS-IV, which closed at €85 million ($113.5 million) in 2013.

According to Wellington’s Regina Hodits, returns from the firm’s fourth fund gave existing and new LPs confidence to invest.

“We had a good stretch out of our previous fund with good exits in the run up to this fund-raising,” Hodits told BioCentury.

Wellington had five portfolio companies acquired in 2015-17 for a total of $1 billion in upfront payments. The exits included two therapeutics companies, two medtechs and a diagnostics company. One, the acquisition of immuno-oncology company Rigontec GmbH by Merck & Co. Inc. (NYSE:MRK), yielded €115 million ($136.8 million) up front; the deal included up to €349 million ($415.2 million) in milestones.

“We had a good stretch out of our previous fund.”

Regina Hodits, Wellington

The upfront payment was nearly a 4x return on the €29.3 million ($32.7 million) Rigontec raised in its series A round (see “Rig-ging an Exit”).

Hodit said the firm’s track record and focus on Europe -- in particular the German-speaking countries where there is less competition for deals -- attracted backing for the new fund from existing family office LPs with larger tickets, as well as new LPs such as Germany’s third-largest insurance group, Talanx AG (Xetra:TLX), and the investment arm of German development bank KfW Capital.

An undisclosed strategic investor and the firm’s first large U.S. LP, the endowment fund for the University of Texas/Texas A&M Investment Co., also invested.

Hodit said the new fund would largely follow the same strategy as previous ones, investing in 15-20 companies with a focus on therapeutics, while also investing in medical devices, diagnostics and digital medicine. Most investments will be in Europe, she said, but the firm will look at opportunities in the U.S. and Asia.

The fund has invested in seven companies to date: five in therapeutics and one each in diagnostics and medtech. Hodit expects that ratio to play out for the rest of the fund.

The fund’s first investment was in a $53 million series A round for cancer cell therapy play Carisma Therapeutics Inc. (see “Spreading Carma” and “Carisma’s Attraction”).

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