Less than two weeks after New York investment advisory firm Ascent Asset Management Advisory Services Inc. acquired Robert R. Meredith & Co., Chief Executive Peggy Farley said the new firm, Ascent Meredith Asset Management Inc., is organizing for the launch of a $100 million private equity fund.
The Ascent Medical and Technology Fund will invest in early-stage companies in the life sciences and information technology industries. The firm will concentrate on investment opportunities that will involve less than a $10 million commitment throughout the life of a company, and will see two-thirds of the capital committed to life sciences.
“Venture funds have become so large that the firms can’t make investments that are less than $10 million,” Farley said. “We will concentrate on smaller size deals and do extremely well, because we are equipped to do so.”
Farley, who handled U.S. investments for an unnamed wealthy international family before forming Ascent in 1997, will manage the fund with former Johnson & Johnson executive Mark Maciejewski and several other investment professionals with the firm.
The fund will have several closes, with a first close, which is expected to be between $25 million and $30 million, intended to occur before the end of the year. The firm will collect a 2% management fee, and the fund will have an 80%/20% carried interest split.
Farley said the fund will target start-ups that may eventually become attractive acquisition candidates for larger health-care corporations who cannot devote their research and development resources to nascent ideas.
“Where we see the world going in terms of companies in medical arenas is that many don’t have a really dynamic research and development department,” she said. “We are looking for companies to develop new technologies and then sell them to lead companies.”
Robert Meredith & Co. was put on the block after its founder of the same name died in an airplane accident last April.
“I knew the company was for sale,” Farley said. “I competed with all my heart to get it and got it.”