Abingworth closes Fund IV at $350m

Within the last week, the firm held a $325m close and expects to book a further $25m in the near future from two additional investors. Abingworth officially announced the launch of its new fund in May 2003 following an intensive pre-marketing effort. The firm decided to cap the fund size to $350m; investor appetite was such that the fund was therefore more than two times oversubscribed.

ABV IV has received commitments from new and repeat investors. The firm has yet to reveal the identity of the fund’s LPs, although 54 per cent of the funds committed originated from the US, 32 per cent from the UK and Continental Europe and 14 per cent from the rest of the world.  The firm also disclosed that 39 per cent came from fund of funds, 29 per cent from pension funds and a further 15 per cent came from endowments and universities. London-headquartered placement agent MVision worked with Abingworth on the fundraising. Abingworth received legal advice from SJ Berwin.

ABV IV will invest in unquoted biotechnology and medical companies, in the UK, Europe and the US. It will invest in platform technologies, therapeutics, medical devices and instrumentation. Investment size will generally range between $1m and $20m, averaging around $15m per investment after all private rounds of financing.

“This is a very satisfying result in what is generally regarded as a difficult fund raising environment,” said Stephen Bunting, managing director of Abingworth. He said he was particularly pleased to have attracted “some of the best names in the industry” amongst the investor group. “It was difficult not to take additional money from some very good investors but we decided that $350m was the limit that we should work with.”

Abingworth was set up in 1973 and has raised eleven funds, of which sixth have been focused on the life sciences business. The firm first invested in life sciences since 1987.

Bunting said the success of the fundraising was in part due to the current potential of the international life sciences sector. “We believe this is an excellent time to invest in this area and clearly our investors agree with us.”

Abingworth has recently added to its European team, hiring Allan Marchington and Raj Parekh as entrepreneurs-in-residence, responsible for the firm’s existing portfolio of companies as well as identifying new opportunities for investment. Late last year the firm appointed Michael Bigham as a director of Abingworth Management and a partner of Abingworth Bioventures III, which closed significantly above its $150m target, at $225m, in December 2001. He is based at the company’s offices in Palo Alto, California.

Abingworth joins a select band of private equity firms that have enjoyed very successful fundraisings at a time when others have been struggling – be they buyout or venture oriented. New funds from firms such as the UK's Graphite Capital, Sweden-based first time fund-raiser Altor (led by former Industri Kapital partner Harald Mix) and longstanding tech VC Sequoia Capital in the US have all closed funds markedly higher than the original target. Although not easy to define the exact elements of a fund's proposition that encourage what some have described as an investor stampede' to commit to these funds it is clear that track record, the credibility and coherence of the GP team as well as specialist knowledge of often niche sectors are all critical factors.