For its new effort, H.I.G. seeks $250 million in commitments, according to a source familiar with the situation. The firm began fund-raising several months ago, the source said.
The firm had allocated about half of its $300 million second fund to life sciences investing, according to Managing Director Aaron Davidson, but the firm now feels that the strategy deserves a dedicated vehicle. H.I.G. Venture Partners II closed in 2005.
The third fund will focus primarily on companies developing therapeutic drugs or medical devices across sectors and stages, Davidson said. Specifically, he said H.I.G. will focus on “capital efficient businesses with large market opportunities in underserved geographies, and products with shorter development.”
Davidson declined to comment on the fund’s target or progress.
H.I.G. BioVentures is a newly formed affiliate of H.I.G. Capital. It’s not clear if the parent firm will raise a separate and new general VC fund, since the firm’s past two VC funds invested in the media, semiconductor, software and wireless companies.
On the buyouts side, H.I.G. raised $3 billion in 2008 for H.I.G. Bayside Debt & LBO Fund II and also manages an $818 million distressed debt fund, called HIG Europe Capital Partners, that it raised in 2007, according to Thomson Reuters (publisher of PE Week).
When asked for clarification on the fate of H.I.G.’s non-life sciences investment strategies, a spokesperson said, via email: “H.I.G. BioVentures II is a focused life sciences fund and extension from prior venture funds that invested in life sciences and technology companies. We have other current funds/strategies, including LBO and distressed debt funds that invest across a broad range of industries.” —Erin Griffith