IPF Partners has begun marketing its second fund targeting investment in high-growth small and medium-sized European healthcare companies.
The firm is aiming to raise between €150 million and €200 million from institutional investors, a significant increase on its debut fund which collected €105 million in a final close held at the end of 2015.
The strategy provides senior loans between €5 million and €20 million in healthcare SMEs unable to obtain financing from the banks with the aim of helping them to profitability.
Loan terms range between three and six years with 20 percent LTVs and target returns between 15 and 20 percent. Investors in the fund include European institutions and a family office, including the European Investment Fund.
Edouard Guillet, partner at IPF, told PDI: “Banks have never lent to such unprofitable companies, with the exception of asset-backed lending. It doesn’t go through the credit analysis.”
Guillet, a former Gilead executive, said that a number of IPF’s team have backgrounds in the pharmaceutical and medical devices sector. “Half of the team comes from the industry and we are a well established in this niche market. Firms reach out to us because they hear about us from other companies we have worked with.”
Last year, the firm committed almost €24 million in financing to three companies. IPF recently finalised a €7.7 million senior loan provided to Mauna Kea Technologies, the medical device company behind Cellvizio, an endomicroscopy system used to treat gastric diseases, pancreatic cysts and inflammatory bowel diseases.
So far, €90 million has been invested across the first fund in 11 companies. IPF has received an early repayment from Bone Support, a firm it backed with a €7 million investment in November 2013.
Established in 2011, IPF, which stands for Intellectual Property Finance, is headquarted in Switzerland. Georges Ralli, a former chairman of the Lazard European Investment Bank and ex-board member of private equity firm Eurazeo, is the chairman of the firm.