LSP has raised $330 million for its second medical technology fund. The big jump in size over the first fund tees up LSP to place bets on 15 companies with close-to-market devices, diagnostics and digital health tools.
Amsterdam-based LSP is looking to scale up the model pioneered by its first fund. That fund started life with about $59 million from Dutch health insurer Achmea and topped out around $132 million.
The involvement of Achmea, the first of multiple insurers to invest in the first round, says something about LSP’s investing strategy. Rather than limit its investment criteria to the potential financial return, LSP also looks at the effect each company’s products will have on healthcare quality and economics. Companies must have a strong health economics case for LSP to invest.
That restriction on the activity of the fund has helped LSP to raise money from insurers, which are affected by spiraling healthcare costs, and hasn’t hindered its ability to pick winners and generate returns.
“Our portfolio companies not only contribute to the sustainability of today’s healthcare systems, they also tend to be highly successful in the market, leading to fast adoption and making them attractive acquisition targets,” Rudy Dekeyser, Ph.D., the fund’s managing partner, said in a statement.
The first fund lists stroke-care player Neuravi and rotator cuff firm Rotation Medical among its successes. Johnson & Johnson snapped up Neuravi in April for an undisclosed, but reportedly sizable, sum. And LSP cashed out of Rotation Medical in October when Smith & Nephew proposed a $210 million deal.
Those successes have helped LSP to ease past its fundraising target for the second fund. With more than twice as much cash to play with this time around, LSP is planning to invest in 15 companies that fit its health economic criteria.