LPs tell Excel to get on with it

Excel Venture Management closed on $125 million for its first independent fund, half of what the health care investor originally set out to raise nearly two years earlier.

The Boston-based firm’s limited partners pushed the general partners to quit fund-raising in favor of investing, Managing Director Juan Enriquez tells PE Week.

Part of the push came from the realization that startup valuations are down, says Enriquez. “The rounds that you are seeing on a whole series of companies ready to go to market are really attractive,” says Enriquez. “We had a sense from the limited partners all this stuff is from the table and we should just do it.”

The firm raised the majority of its Excel Medical Ventures fund—$100 million of the $125 million—between October 2007 and February 2008, according to regulatory filings. Early investors included the John D. and Catherine T. MacArthur Foundation and the Hartford Capital Appreciation Fund, MB Private Equity Partners II and the Meadows Foundation, regulatory filings show. It is a mixture of foundations, family offices and pension funds, says Enriquez.

A 13-month dry spell followed the initial round of funding, filings show.

In March 2009, the firm hired four placement agents— IVP Capital, Ariane Capital Partners, Abshier, Webb, Donnelly & Baker, and Sword Securities Corporation—to sell its fund, offering each firm 2% of whatever commitments it could secure, filings show.

Excel Venture Management managed to collect an additional $25 million after hiring the placement agents.

The firm then set its sights lower, revising its fund-raising target to $200 million from $250 million.

Excel has already made investments in three biotech companies, such as Aileron Therapeutics Inc., BioTrove Inc. and Synthetic Genetics.

Excel Venture Management formed in 2007 as a combination of investors from CB Health Ventures and Biotechonomy Ventures. Its managing directors are Enriquez, Frederick Blume, Enrico Petrillo and Steven Gullans.