GBS Ventures fund achieves global first quartile performance
13th Oct 11
GBS Ventures completes healthcare fund with global first quartile performance
GBS Ventures has made the final realisation from its 1998 vintage life science venture capital fund. The fund exceeds top quartile performance metrics based on return on invested capital and distributions to paid-in capital, relative to life science funds in its US peer group raised in 1998. Further, the fund delivered investors a premium to the all ordinaries accumulation index, and small ordinaries accumulation index over the period.
“This result vindicates our strategy of building world class Australian life science companies to create superior returns for our investors,” said Managing Director Brigitte Smith. “We are delighted to be able to deliver this result to our superannuation fund and corporate investors.”
The Australian Bioscience Trust (ABT) helped to build Australian life sciences success stories such as Pharmaxis, Alchemia and Cogstate, all of which are now public and part of the growing and vibrant Australian life science sector. These companies are delivering important products to treat cystic fibrosis and asthma, to help prevent blood clots, and to diagnose central nervous system diseases.
“GBS provided our founding capital and helped guide us through the highs and lows of biotech product development. Without GBS, our products to treat global respiratory diseases would not have been developed” said Dr Alan Robertson, CEO of ASX listed biotech Pharmaxis.
The ABT invested in a total of eleven companies, and made the final realisations in the past quarter, with a sale to Wolfson Microelectronics of Dynamic Hearing. Dynamic Hearing is a leading provider of high quality audio Digital Signal Processing technology for personal communication devices such as mobile phones, Bluetooth headsets and hearing aids.
Australia has long been a source of globally significant biomedical research, with 5 Nobel prize winners in medicine, and very high rankings in global indices for its research institutions. Dr George Morstyn, chairman of GBS Ventures and former Chief Medical Officer of Amgen, the world’s largest biotechnology company, said “Now the commercial impact of Australia’s high quality research is being realised. GBS takes Australian biotechnology to the world.” In the time since the ABT was founded the market capitalisation of the Australian life science sector has grown from $4.8bn to $31.7bn. Australia now has the largest listed biotechnology sector as a proportion of GDP in the world.
The Fund was raised under the Australian Government’s Innovation Investment Fund (IIF). The IIF is a venture capital program that supports new innovation funds and fund managers with expertise in early-stage venture capital investing. It co-invests with private sector investors in venture capital funds to assist early-stage companies to commercialise the outcomes of Australia's strong research capability. The objectives of the program were to:
- develop fund managers with experience in the early stage venture capital industry by addressing capital constraints and management constraints;
- encourage the development of new companies that are commercialising research and development;
- establish, in the medium term, a ‘revolving’ or self-funding scheme;
- develop a self-sustaining, early stage venture capital industry in Australia.
Since 1998 GBS has continuously been actively investing in Australian biotechnology. GBS has built a strong team that has worked together for more than a decade, and raised three subsequent funds entirely from private sector investors. GBS has more than $400m under management, its investors include major Australian superannuation funds. The firm is currently seeking new lifescience investment opportunities for its 2008 vintage $122.5m GBS Bioventures IV.
The ABT supported development of a number of strong companies that are now exporting products to major global markets, employing Australians in high value life science jobs. The ABT has returned the funds invested by the IIF plus a return that has contributed to making the IIF self-sustaining.
“The IIF program gave us our start in the venture capital industry, and we believe that we have achieved all of the program objectives. These results demonstrate GBS can build Australian life science companies that export into major global markets, create high value jobs and create products to treat major diseases, and ultimately deliver sustainable returns to our investors,”” said Managing Director Dr Geoff Brooke.
About GBS Ventures
GBS Venture Partners (GBS) is a leading Australian life science venture capital firm.
Founded in 1996, GBS invests in young businesses developing and commercialising products which, when combined with the right management and finance, will make a significant difference to patients' lives and deliver financial returns to our investors. Our areas of particular interest and expertise include human healthcare, biotechnology product development and life science start-ups. In particular, recent investments have included biological or small molecule therapeutics, medical devices and diagnostics.
GBS manages over $400 million across five funds. In March 2009, GBS completed a fund raising for GBS Bioventures IV, a $122.5 million fund which has the capacity to invest up to $10 – 12 million per investee. Previous funds include:
- The Australian Bioscience Trust
- GBS Bioventures II
- The Genesis Fund
- GBS Bioventures III
GBS uses these and other funds under management to make a significant commitment to building life science based companies based on Australasian technology and development capabilities.
The GBS team use their experience in life science investing to take an active role at board level in portfolio companies; provide strategic advice and support at all stages of company development; access specialist scientific and technical advice and make introductions to international networks and strategic corporate collaborators.
GBS Venture Partners
+61 3 8650 9920
 Cambridge Associates LLC, June 2011
 E&Y Beyond Borders global biotechnology report 2010, 2011
Author: Kosta Sinelnikov, Senior Research Analyst, AVCAL