Four of the nation’s largest industry superannuation funds are backing a new venture capital fund aimed at supporting Australian health and medical research.
Brandon Capital Partners’ third Medical Research Commercialisation Fund (MRCF3) has announced that it has raised $200 million from Australian Super, HESTA, Statewide Super and Hostplus.
The deal is the biggest venture capital commitment in Australia’s history and creates the nation’s biggest life sciences fund.
Around $50 million of the new fund will be reserved for 20-30 very early seed stage investments in promising biotech or medical device technologies.
The remaining $150 million will be reserved for supporting the most successful of these and existing MRCF portfolio companies to take these opportunities through to mid-stage clinical trials in patients.
"Finally, under the new fund structure, each of the superannuation investors have the opportunity to invest much larger amounts of capital (tens of millions) into the most promising assets as they mature," the company said in a statement.
“Australia consistently ranks as one of the top nations for medical research, but one of the worst for bringing those discoveries to market,” Brandon Capital Partners managing director Chris Nave said.
He continued, “This failing has been largely attributed to the lack of sufficient early stage investment capital and access to hands-on investment expertise to guide the development and commercialisation of these medical technologies. The performance of the MRCF funds over the past 7 years demonstrates that its unique investment model has overcome these deficiencies.”
Promising life sciences companies incubated by the group’s two earlier funds include Fibrotech Therapeutics, Global Kinetics Corporation, Osprey Medical Inc, PolyActiva, Spinifex Pharmaceuticals and Vaxxas.
“We want to find the next Cochlear, CSL or Resmed,” Mr Nave said.
Over 50 of Australia’s leading medical research institutes and research hospitals are collaborative members of the fund.
MRCF3 has a first right to invest in discoveries from its hospital and university research partners. In exchange, all partners get a small share of the profits when one of the other partners earns a windfall, so all parties have an incentive to help their competitors succeed.
Mr Nave said the due diligence is already complete on four early stage ventures that will receive seed funding through MRCF3.
According to Chairman of the MRCF, Hon. Alan Stockdale, “The unique MRCF model is proving to be highly successful: Last year’s acquisition of Fibrotech Therapeutics, one of the MRCF’s earliest investments, by Shire Plc was a landmark deal for the Australian biotechnology sector. This eyecatching acquisition was a validation of our approach to effectively support medical innovation in this country, leading to benefits for patients, for the Australian economy and returns for our investors.”