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LDC enters biotech market

Lloyds TSB Development Capital (LDC), the venture capital arm of Lloyds TSB, has announced the launch of a medical sciences fund in a partnership with Technomark Medical Ventures (TMV), the investment advisory division of the biomedical consultancy, Technomark Consulting Services Ltd. The vehicle, which will focus at the smaller end of the European early-stage biotech companies market, marks LDC’s move into a new investment sector. LDC has made an initial commitment of GBP10 million and intends to make investments in the region of between GBP500,000 to GBP2 million.

The launch of the fund is in line with recent Lloyds TSB announcements including joint-venture funding arrangements with Antfactory (see EVCJ September 2000, p12) and the London Business School’s incubator, Sussex Place Partners. The new fund will invest in areas such as drug delivery, medical devices and services, diagnostics and biotechnology.

According to TMV, the fund has been set up to fill a funding gap faced by many growth companies in the medical sciences sector. The investment committee of the fund includes Michael Joseph and Tony Chandler, managing directors of LDC and Technomark respectively, and the British Venture Capital Association’s new chief executive, John Mackie.

Paul Kacik, investment director at TMV, stressed that there are an emerging number of investment opportunities within the medical science sector in the UK and continental Europe and he stated that company formation within the sector had grown at a compound annual rate of 23 per cent over the last four years. Kacik added that he expects the fund to reach full investment in two years’ time and says TMV hopes that institutional investors will top up the fund thereafter.

Commenting on the fund, Steve Carle, investment director at LDC, said: “The Technomark arrangement represents a significant step forward for LDC’s business as it enters the early-stage biomedical private equity market. We will continue to look at similar funding arrangements as a way of expanding into areas which have been previously viewed as outside our core business of making GBP1 million to GBP15 million investments in established UK manufacturing and service-based companies”.