Sofinnova, one of France’s pioneering venture groups, which led the way in start-up funding for IT and life sciences ventures and was the first French venture capital group to set up a US operation, has been bought out by its management team. Its partners announced in February that they have acquired a majority stake in a new management company, Sofinnova Partners.
Sofinnova is taking over the management of Sofinnova SA’s portfolio and management of its externally raised funds, the FFr 250 million (ecu 38 million) Sofinnova Capital and FFr 310 million Sofinnova Capital II vehicles. In parallel, the US team is taking over management of Sofinnova Ventures funds I-III, which together total $57 million (ecu 53 million) through a new structure, Sofinnova Inc.
Managing partner Jean-Bernard Schmidt said the decision to go independent was not a direct response to the merger of Credit National, the parent Sofinnova’s largest shareholder, Financiere Saint Dominique (FSD), with BFCE, but “more a result of market evolution”. The transition to independence, he said, was a logical conclusion to a process set in motion early in the 1990s when Sofinnova first began raising external funds. Work on the buyout began early last year.
Sofinnova’s original shareholders were FSD (37%), Paluel-Marmont (25%), the Kuwait Investment Office, France Telecom, UAP, Total Petrol and Electricite de France. These groups have a minority holding in Sofinnova Partners; ultimately, this holding will revert to the partners in the new management company. Sofinnova Partners holds a minority stake in the new US management company and vice versa.
Both the French and US teams are set to increase funds under management this year. Sofinnova Partners plans to launch Sofinnova Capital III this Spring. Like its predecessors, the fund, which will have a target of FFr 500 million, will focus on start-up and early-stage IT and life sciences investments, primarily in France, but also in other European markets.
Meanwhile, the US team has just brought Sofinnova Ventures IV to a first close on $30 million, half way to its final target.