Wednesday, January 16, 2008

Orion to Cover Both Sides of the Atlantic

In most venture circles, talk around forming an international strategy generally leads to VCs staging fact-finding missions to China and India. But a great deal of opportunities still lie in the Old World as VCs grapple with how they might do a better job at investing in Europe where the industry is maturing but the capital can sometimes be scarce.

A new firm is in the market to raise a fund that will target this particular problem. Orion Healthcare Equity Partners, founded by Mark Carthy, who has left Oxford Bioscience Partners, and Joël Besse, formerly of Atlas Venture, is seeking a $250 million fund to invest in both sides of the Atlantic, according to people familiar with the effort.

The new firm will maintain offices in London and Boston and expects to bring aboard additional partners later this month or early next. Orion apparently will pursue clinical-stage companies or assets in the U.S. and Europe. It’s unclear whether the firm would attempt relocate assets from one continent to the other, but that seems to be a possibility.

Carthy and Besse certainly have expertise in straddling the Atlantic. While at Oxford, Carthy served on the board of UK-based Solexa Ltd., the genomic sequencing company that would be acquired by Illumina Inc. He also represented Oxford in its investment in another UK company, PowderMed Ltd., which Pfizer would acquire after several Trans-Atlantic transactions.

Meanwhile, Besse managed many of Atlas’ European investments from its London office. He was among the founding investors in publicly traded Actelion Pharmaceuticals Ltd. and Novuspharma S.p.A.

Clearly, Orion will have some homegrown competition (or co-investors depending upon how you want to perceive things). We've been writing about VCs and VC investments in the UK, France, Germany and Spain. But a little more capital certainly wouldn't hurt.

What will be interesting to see how institutional investors view a trans-Atlantic fund. In years past, firms with strategies that covered both sides of the Atlantic had to work hard to sell their plans to limited partners. But times have changed. The investment climate does show some positive signs of life, and the world is a considerably smaller place than it was four or five years ago.

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