Big PE firms look to partner with VC firms on life sciences, Emerging managers weather tough markets

Emerging managers wrestle with fundraising challenges.

Morning Hubsters!

Hope all is well in your world. Nice to be moving into summer.

Tech: Reporter Aaron Weitzman has a feature today exploring private equity’s efforts to partner with venture capital to build up exposure to life sciences. Some recent examples include Apollo’s May announcement it would commit up to 1 billion euros for a minority stake in Sofinnova Partners; Carlyle’s acquisition in April of Abingworth; and EQT’s purchase of LSP in November, which invests in companies with scientific and clinical rationale across several life sciences strategies.

“In life sciences in particular, given the highly specialized, scientific nature of the sector, partnering with a team that is deeply versed in the science like Sofinnova is critical to meaningfully scale and accelerate our investment activity,” Neil Mehta, partner and global head of strategy at Apollo, told PE Hub.

From Sofinnova’s view point, the deal will allow the firm to accelerate growth. “Now that they are bolstering our balance sheet, one of our first initiatives will be to hire more people,” Antoine Papiernik, chairman and managing partner of Sofinnova, said. “Hiring talent is the single most important thing we can do.”

Fundraising will also be an important part of the partnership.
“Having a partner that participates in a fund we will be raising in the future is a vote of confidence from them to us, and large LPs – their LPs – will look at this as a positive, so we hope we can get into their LP base.”

Read more here on PE Hub.

Frustrating: Having made it to the other side of the pandemic, fundraising for emerging managers has only become harder. This is perhaps the dynamic that is most frustrating for newer managers, given that many firms figured out the challenges of virtual fundraising.

First-time fundraising faced a two-pronged assault over the past two years. The pandemic made fundraising much harder for new firms, for the simple fact that LPs did not know them and were reluctant to form new relationships with managers with whom they had never even shared a handshake.

And because of the uncertainty, LPs were more willing to stick with their long-time relationships rather than form new ones. Established managers took full advantage of this preference, raising larger funds and creating new parallel products to absorb more LP allocation.

Buyouts explores how a few emerging managers withstood the uncertain markets and found ways to close first-time funds. Read more here on Buyouts.

That’s it for me! Have a great rest of your day. Reach me with tips n’ gossip, feedback or book recommendations at or over on LinkedIn.