RiverVest Venture Partners has closed its second fund with $75 million in capital commitments. Its first fund had raised $45 million, plus SBIC leverage from the SBA. The St. Louis-based firm focuses on early-stage life sciences opportunities.
RiverVest Venture Partners announced today that it has completed fundraising for its second fund, RiverVest Venture Fund II, L.P., with total committed capital of $75 million from private investors. RiverVest's first fund, which was licensed as a Small Business Investment Company, had total private capital of $45 million, plus one tier of leverage from the Small Business Administration.
RiverVest co-founder and managing director Thomas C. Melzer said, “We are pleased by the significant increase in the amount of private capital committed to Fund II compared to Fund I, as well as the broadening of our institutional investor base that this increase reflects.”
Out of 16 investments in RiverVest's Fund I, half were sourced in the Midwest, including three in St. Louis. “This strategy is appealing to institutional investors, who don't like narrow geographic limits but do like the attractive valuations available in the Midwest,” said Jay W. Schmelter, also a RiverVest co-founder and managing director.
RiverVest's Fund I portfolio currently includes 10 active companies: Five in medical devices, three in biopharmaceuticals, one in specialty pharmaceuticals, and one in healthcare services. Eight of these are fully funded to profitability or an exit.
Fund II will pursue the same investment strategy as Fund I, with a focus on early-stage medical device and biopharmaceutical opportunities. The Fund II portfolio currently includes six active companies, three of which were co- founded by RiverVest.
“We invest nationally to diversify our portfolio and to build relationships with leading venture capital firms on the coasts – firms that will present investment opportunities to RiverVest as well as participate in those we originate,” said Mr. Melzer. “At the same time, we are located in a region with many outstanding research institutions, but one that is under- served by the venture industry.”
In addition to closing on Fund II, RiverVest Venture Partners announced that John P. McKearn, Ph.D., has joined the firm as Venture Partner.
“We've known John since Pfizer bought Pharmacia back in 2003 and have kept in close contact ever since,” said Mr. Schmelter. “John's strong scientific training and operational expertise will further our capabilities in sourcing and adding value to our biopharmaceutical portfolio.”
While leading Kalypsys, Inc., a privately held biotechnology company in San Diego, Dr. McKearn raised more than $150 million in private equity from 2003-2006. As head of Research for Searle and Pharmacia, Dr. McKearn was an important contributor to the discovery, development and launch of no fewer than eight new prescription drugs, including Celebrex, one of the leading pharmaceuticals to treat arthritis.
“I believe in the quality of RiverVest's personnel, investors and portfolio, along with their vast industry and academic networks,” said Dr. McKearn. “Fund I has had an impressive track record, and I look forward to applying my expertise to building RiverVest's biopharmaceutical presence.”
Dr. McKearn holds a Ph.D. in immunology from the University of Chicago and a B.S. in biology from Northern Illinois University. He currently serves as a member of the board of directors for IDM Pharma (formerly Epimmune) and for Keel Pharmaceuticals.
About RiverVest Venture Partners
RiverVest Venture Partners is a venture capital firm investing in promising life sciences companies nationwide. RiverVest applies both its capital and its team's diverse range of expertise to create and grow successful enterprises that address unmet medical needs in major markets. RiverVest's extensive national network and privileged access to opportunities throughout the Midwest enable the firm to build a diverse portfolio of innovative, product-focused companies. www.rivervest.com