In Late June, Alta Partners closed on $439 million in commitments for its life-science-only eighth fund, according to a regulatory filing, as the firm dropped the last vestiges of its information technology practice.
The firm beat its initial target of $425 million and might hit its $500 million cap this summer.
Two of the firm’s 12 investors will not be putting money to work in Fund VIII. Director Garrett Gruener, an Alta co-founder and backer of Ask Jeeves, will instead work with Director Robert Simon to manage the firm’s existing IT portfolio investments as that part of the firm’s practice winds down.
Alta was poised to enter the ranks of a select set of firms with distinct life sciences and information technology funds. But the IT team started coming apart at around the time that Gruener ran for governor in the California recall election of 2003, in which he received 2,562 votes. This in April 2004, Mike Boich and Khaled Nasr, the firm’s other IT experts, bolted to join InterWest Partners. Simon turned down an InterWest offer at the time, according to PE Week, a VCJ affiliate publication.
Nasr and Simon were recruited to Alta in 2000 to help build the IT practice, which consisted of Gruener and Marino Polestra, who is also no longer with the firm. Boich, who has launched several hardware and software startups, joined Alta in 2003.
The firm has 11 portfolio companies currently in its information technologies portfolio, according to its website, including nanotech sensing company Nanomix; micro-fuel cell maker Neah Power Systems and network risk assessment company nCircle.
Some might call scrapping an IT practice in favor of health care a smart move, considering how so many life science investors have been seeing solid returns in the public markets and from strategic acquisitions. VCs sold $10 billion worth of health care startups during 2005, according to Dow Jones VentureOne research, and nearly half of last year’s 56 VC-backed IPOs came from the sector.
In life sciences, Alta has recorded a number of exits over the last 18 months, including the $49 million sale of Cellomics to Fisher Biosciences; an acquisition of Morphochem by Biovertis for an undisclosed price; a $60 million sale of Cellective Therapeutics to MedImmune Inc. (Nasdaq: MEDI); and the $42 million IPO of Sunesis Pharmaceutical (Nasdaq: SNSS).
The only limited partner listed on the regulatory filing for fund VIII was the Employee Retirement Income Plan Trust of Minnesota.
LPs in previous funds have included Adams Street Partners, the Ontario Municipal Employees Retirement System, SH Private Equity, the pension arm of Unisys Corp. and Shott Capital Management. —Alexander Haislip