For Immediate Release
Bay City Capital Closes Largest Fund Yet
October 26, 2007
Health-care investor Bay City Capital has closed its fifth partnership at $500 million, its largest fund yet.
The San Francisco firm closed the vehicle at its hard cap, according to Fred Craves, managing director and founder. The target for Bay City Capital Fund V LP was $425 million.
The new fund is significantly larger than its $350 million predecessor, closed in 2004. The partners have backed 16 companies from fund four and may make one more investment from that pool, Craves said.
Bay City, formed in 1997, raised its first three funds from the Pritzker family trust and from firm members, Craves said. It diversified its investor base for funds four and five, drawing capital from Pritzker family members but also from endowments and other institutions, he said.
Limited partners in its fourth fund include Alpinvest Partners NV, according to a 2005 article in sister publication Private Equity Analyst. Aside from Pritzker family members, Craves declined to name the limited partners in fund five, though he said 30% of them are new. He said the firm expects to begin investing fund five this year.
The larger pool will enable Bay City to sink larger sums into the 15 to 20 biotechnology, medical device and diagnostics companies it intends to back with the new fund. It typically leads or co-leads deals and strives to maintain double-digit ownership stakes, Craves said. With the cost of driving companies to value-creating milestones on the rise, the firm decided it needed a larger fund.
The firm intends to continue to invest at all stages, including seed-stage bets on start-ups launched in-house and structured investments in publicly traded companies. With fund four the firm launched flu vaccines company Vivaldi Biosciences Inc., for example, and also invested in publicly traded cancer-drug maker Poniard Pharmaceuticals Inc. Other portfolio companies include MAP Pharmaceuticals Inc., which went public early this month.
Though the firm makes most of its investments in the U.S., next year it intends to open an office in Switzerland that will give it easier access to European companies, Craves said. Investment Partner Lionel Carnot will lead the office, he said.
In addition to Craves and Carnot, the investment team also includes Investment Partners Carl Goldfischer, Jeanne Cunicelli, Doug Given, William Gerber and Dayton Misfeldt.
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