HBM Partners Launches Fund

While American venture capital firms are flocking to embrace emerging entrepreneurial opportunities in Europe, Zurich-based HBM Partners is eyeing investments on both sides of the Atlantic. Only a few weeks old, the firm is in the midst of raising its first fund, HBM BioVentures, with a mind to pursue both public and private deals in the biotechnology and pharmaceutical sectors.

Targeted at CHF 711.5 million (approx. $400 million U.S.), HBM BioVentures has already amassed CHF 355.7 million (approx. $200 million U.S.) in oral commitments without any active marketing efforts on the part of the firm?s six managing partners, said Cominelli Silvano, a founding partner with HBM Partners. Instead, calls have been flooding in from pension funds, endowments and the like on both American and European shores.

The firm expects to formally close the fund by the end of June, and will only call half the capital this year “in order to guarantee steady nerves and invest carefully,” Silvano explained. It plans to call the remaining capital next April.

Despite the fact that HBM Partners? investment strategy straddles the Atlantic, it has no immediate plans to open a U.S. office, although it hasn?t entirely ruled out the possibility of establishing a U.S. presence sometime down the road, Silvano said.

For now, its offshore investments will be made remotely from its Zurich headquarters, and will rely mostly on the connections of its VC partners in both Europe and the U.S. to make inroads in both locales. Some of its potential investment cohorts might include Sofinnova Partners, APAX Partners, MPM Capital and Alta Partners, as the HBM fund managers already have connections at those firms.

Although HBM Partners is still ironing out the fund?s exact asset allocation details, it hopes to invest about 55% to 60% in pure biotech and emerging pharmaceutical plays, with the remaining 40% to 45% being pumped into health-care-related platform technologies, medical technologies and health care services.

All tolled, the firm intends to bring between 50 and 70 portfolio companies into the fold, with an almost-even split between the public and private sectors. At the outset, it will focus mostly on PIPE deals and spin-offs in America and emphasize private equity transactions in Europe. The fund is expected to be fully invested in the next two years.

HBM Partners hasn?t sealed any deals just yet, but it already has a pre-fab portfolio of public companies to invest in if it so chooses, as well as more than 25 private candidates lined up.

Still, Silvano said he and his partners plan to take it slow, despite his belief that the firm?s fund-raising efforts are actually a bit behind the curve. “We are already too late,” he said. “We would have preferred to have the money three months ago.”

Robyn Kurdek can be contacted at: Robyn.Kurdek@tfn.com