Firms & Funds

Global Health Investment Fund eyes 2018 for Fund II launch

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Global Health Investment Funds, private equity
A government health worker takes a blood sample to be tested for malaria in Ta Gay Laung village hall in Hpa-An district in Kayin state, south-eastern Myanmar, November 28, 2014. Malaria death rates dropped by 47 percent between 2000 and 2014 worldwide but it still killed some 584,000 people in 2013, most of them in sub-Saharan Africa, according to the World Health Organization (WHO). Much of the success in fighting the disease is due to the use of combination therapies (ACTs) based on artemisinin, a Chinese herb derivative, which is now under threat as malaria parasites have been building up resistance to the drugs. Experts say Myanmar, which has the largest malaria burden in the region, is the next frontier in the spread of resistance to artemisinin. Picture taken November 28, 2014. To match Feature HEALTH-MYANMAR/MALARIA REUTERS/Astrid Zweynert (MYANMAR - Tags: HEALTH POLITICS SOCIETY) - RTR4I6C9
  • Global Health Investment Fund investing Fund I since 2013
  • 6 portfolio investments under its belt; more ahead
  • Fund typically invests $10 mln per project

Global Health Investment Fund plans to return to the fundraising market by 2018 for Fund II, going beyond the six initial investments from its $108 million inaugural pool, an executive at the New York firm said.

With backing from major LPs such as JPMorgan Chase, the Bill and Melinda Gates Foundation, Grand Challenges Canada and KfW, GHIF sees a strong pipeline of potential investments.

Global Health Investment Fund focuses on late-stage R&D and the early commercialization of affordable healthcare products.

Candidate investments must check off two boxes: potential investment returns comparable to public-market benchmarks, and the potential to improve healthcare and save lives as a social-investing play for limited partners.

Curt LaBelle, managing partner of GHIF, said he expected the firm to make a handful of investments over the next 18 months, after the six portfolio-company deals since the firm launched in 2013. The firm typically looks to invest about $10 million per deal.

“We are focused for the most part on infectious diseases, on maternal and child health, and within those sectors there are lots of opportunities,” LaBelle said.

“We don’t see any problem in putting a handful more of deals into our portfolio in the next 18 months. The pipeline is steady.”

While it sits partly in the social-impact-investing bucket, GHIF is structured much like a traditional private equity fund. The GP gets 20 percent of the carried interest and LPs get 80 percent.

But the fund has other nuances. “It’s not just aiming to return capital with gains,” LaBelle said. “We’re also measuring by number of lives saved and lives improved.”

On this front, the firm tracks its progress on its website under the heading of “Preliminary Social Impact Metrics.” At last check, its investment in Access Bio, a provider of rapid diagnostic tests to track malaria and other diseases, has improved an estimated 1.5 million lives and saved 3,000.

Among its recent deals, GHIF provided a $6 million loan to Atomo Diagnostics to help it commercialize a self-test solution for HIV and other diseases.

Other LPs in the firm’s first fund include GlaxoSmithKline, Merck, Pfizer, and Children’s Investment Fund Foundation.

Action Item: Global Impact Investing Fund: www.ghif.com/sponsors-partners/

A government health worker takes a blood sample to be tested for malaria in Ta Gay Laung village hall in Hpa-An district in Kayin state, southeastern Myanmar, on November 28, 2014. Photo courtesy Reuters/Astrid Zweynert