Schroder Vehicle Reaches First Close –

Schroder Ventures International Life Sciences Fund II notched a $127 million first close in December and likely will exceed its target when the vehicle wraps by the end of the first quarter.

The fund had indications of interest “substantially greater” than its $200 million target, said Schroder Managing Director and Chief Executive James Garvey.

International Life Sciences II will devote one-third to one-half of its capital to buyouts and later-stage venture, Mr. Garvey said. The fund will invest broadly in life-science companies, including those addressing the environment and animal health.

A Global Approach to Life Sciences

About 50% to 60% of the capital will be invested in the U.S., with the remainder primarily in Europe and some in Asia, Mr. Garvey said. International Life Sciences Fund II, like its predecessor, often will invest side-by-side with other Schroder vehicles. The multinational firm has 23 funds totaling more than $3.5 billion. The 12-member life sciences team, headed by Mr. Garvey, is split between Boston and London.

Backed by returning and new investors, the vehicle is a follow-on to the $100 million International Life Sciences Fund raised in 1994. About 40% of that pool was invested in buyouts, primarily in health-care services. The remainder went into seed and early-stage companies, mostly in biotechnology and devices.

Staffing Up While Winding Down

To help manage the new fund, Schroder last year hired two partners, two principals and a chief financial officer, and the life sciences team plans to add two more senior-level professionals, one for Boston and one for London, before the final close.

Hingge Hsu and Tom Daniel joined the firm as principals in the second half of 1998. Dr. Hsu had been an investment banking principal at Robertson Stephens & Co. prior to joining Schroder. He also has held posts at Chiron Corp., Gensia Inc. and Lehman Brothers and began his career as a physician.

Mr. Daniel came to Schroder from Domain Associates. Prior to that, he worked at Charles River Ventures, founded C.I.I., a strategic advisory firm, and had been a financial analyst at Smith Barney. Dr. Hsu is based in Boston, and Mr. Daniel in London.

Michael Carter and Jonathan Gertler joined the life sciences group as venture partners. Dr. Carter has been an executive and a board member at several life-sciences companies, including Salick Healthcare, a U.S. subsidiary of Zeneca Pharmaceuticals, and also practiced medicine before joining the business world.

Dr. Gertler is an associate professor of surgery at Harvard Medical School and associate director of the vascular laboratory at Massachusetts General Hospital. He works with Schroder in Boston, and Dr. Carter works in London.

Donald Nelson left Ernst & Young last year to become chief financial officer in Schroder’s Boston office.