Private equity healthcare firm ArchiMed has closed its small cap-focused MED III fund on its upper limit of €650 million after less than two months of fundraising.

The fund is twice the size of its predecessor, the fully invested MED II fund, which closed on €315 million in 2017. MED III targeted €500 million and received hard commitments in excess of €1.3 billion.

ArchiMed founder and managing partner Denis Ribon said: “Investors pushed us towards a significantly higher hard cap. But we wanted to stay true to the fund’s focus on smaller firms, so we capped this where it makes sense for the strategy. Investment discipline is key to our success and we’ve sized MED III to provide a seamless transition from MED II, based on a very strong deal pipeline.”

More than 95% of MED II investors re-upped. Some 25% of MED III investors – existing and new – come from the US, with 50% spread through most of the EU countries and the remainder from European countries outside the EU. Some 85% are institutional, mostly endowments, foundations, insurance companies and pension funds, while 15% are family offices. MED III was raised exclusively by virtual means, with no placement agent. Clifford Chance acted as legal advisor.

Using limited leverage so as not to compromise growth opportunities, MED III will target 12-14 majority control investments in healthcare companies with annual revenues of between €10 million and €100 million in Europe and North America, partnering with families, founders and management teams. Prioritised healthcare industries include biopharma and related services, medtech, life sciences, diagnostics, consumer health and healthcare IT.

The latest fund’s predecessor, MED II, invested in a total of 11 companies and is a top quartile performer for global buyout funds for its vintage year, according to Preqin.

ArchiMed’s inaugural MED I fund, which raised €150 million in 2014, invested in nine companies and is currently ranked the best-performing buyout fund on a global level for its vintage year, registering a total return in excess of six times invested capital (it’s already distributed more than four times invested capital to limited partners). ArchiMed’s mid cap-focused MED Platform I fund, which held a final close on €1 billion last August, is now 70% invested.

ArchiMed is headquartered in Lyon, France.

Date published: August 12, 2021

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