PA PSERS backs two Sante health venture funds

  • Commitment split into two $75 mln stakes in Fund III and Fund IV
  • $56 bln pension expects Santé’s Fund III to hit hard cap of $250 mln
  • Santé will look for Texas-based health companies overlooked by other venture investors

Pennsylvania Public School Employees’ Retirement System committed $150 million to two Santé healthcare funds.

The $56 billion pension committed up to $75 million to Santé Health Ventures III and up to $75 million to Santé Health Ventures IV. Fund III has a target of $200 million and a hard cap of $250 million, making the pension’s $75 million commitment a sizable share of the overall fund.

The target size for Fund IV was not reported by PSERS. The pension system expects Fund III to hit its hard cap, according to a PSERS memo recommending the investment.

For both funds, Santé seeks to make early stage healthcare investments with a focus on Texas and the central U.S., according to PSERS.

Texas has a world-class healthcare infrastructure — ranking second in the number of medical schools, third in number of ongoing clinical trials and third in total life-science expenditures — but it historically lacked dedicated healthcare venture capital, according to PSERS.

Santé expects to find better deal terms and advantaged deal flow by focusing on the  “geographic void” left by other venture investors.

PSERS had previously invested in two earlier Santé funds, and the new commitments bring its total commitments to about $521 million.

Action Item: Read more on PA PSERS’s investments here https://bit.ly/2T4TJmX