German venture firm SHS has launched SHS Fonds III, a fund with a target investment volume of €70m to invest primarily in young, rapidly expanding companies in the healthcare and life sciences sectors in the German-speaking region, especially in the medical technology, diagnostics and services sectors.
The firm plans a first closing at the end of 2006, and aims to make a 30% gross return per annum, with a minimum stake for investors of €1m. SHS plans, initially at least, to invest on average €2m to €4m per company, and states that it will not invest in companies, which require many funding rounds, in order to avoid diluting its equity.
The fund will not be investing in early stage companies, which it regards as too risky, and will instead focus on those businesses that already occupy profitable niches in their market segments and whose products or services have already reached market maturity.
Bernhard Schirmers, chief executive and partner of SHS, says that the German-speaking region is producing both technology and deal flow in the healthcare and life sciences market; combined with the needs of a growing and ageing population, this makes the global healthcare market an attractive one. He also believes the lower entry prices for German companies give the market an edge over the higher-priced American ones.