Psilos Group Looks to Raise $400M VC Fund

The Psilos Group, a healthcare focused VC, is looking to raise $400 million with its latest fund, three sources say.

Psilos held a first close in December of roughly $50 million, one of the sources say. The target for fund IV is $450 million, that person says.

Founded in 1998, Psilos currently has $585 million under management. The firm’s third fund, Psilos Group Partners III LP, raised $303 million in 2007.

Psilos, which has offices in New York, Corte Madera, Calif., and Santa Fe, N.M., invests in healthcare services, healthcare information technology and medical technology. The VC firm typically puts in from $8 million to $15 million per deal and expects to invest up to $20 million to $25 million over the life of an investment, according to the Psilos web site.

“[Psilos has] had some nice exits over the past 12 months,” a banking source says.

“They have a long track record of investments in successful companies,” another banker says.

Psilos led a $30 million financing round for Mauna Kea Technologies in 2008. Mauna, which makes the world’s smallest flexible microscope, went public in France in July, raising about $70 million.

Earlier this year, Psilos sold InSound Medical, a provider of extended wear hearing aids, to Sonova Holding for $169 million.

UnitedHealth acquired another Psilos company, QualityMetric, in 2010 for an undisclosed amount. One of Psilos’ biggest exits came in 2005 when it sold ActiveHealth Management to Aetna for about $400 million.

Officials for Psilos declined comment.

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