RiverVest Venture Partners’ Fund II has delivered a return of more than double that of a respected benchmark that delineates top-performing venture capital funds.
Focusing exclusively on life science innovations, RiverVest delivered to its Fund II limited partners a 14.5 per cent per annum net internal rate of return (IRR) from inception in 2006 through the end of last year, after fees and expenses. The median net IRR for all reporting VC funds begun the same year, including IT funds, was 4.54 per cent, according to Cambridge Associates, an investment advisory firm.
According to the most recent Cambridge report, the net IRR required to be in the top quartile of healthcare VC funds launched in 2006 is 8.08 per cent per annum – a return that RiverVest almost doubled through the end of 2012.
"RiverVest continues to outperform even some of the top venture capital firms in the asset class and has established itself as a leader in the healthcare space," says Boston-based investor John F Brooke, who manages the Vectis Healthcare & Life Sciences Fund, which is an investor in RiverVest Venture Fund II.
Contributing to its return on investment was the successful sale of four RiverVest portfolio companies (three of which were in Fund II) for more than USD1bn for which investors received payouts a year ago. But the distributions continue, with USD14m in additional proceeds received in 2012 both from the sale of Cameron Health, another Fund II portfolio company, and milestone payments relating to Cameron and the 2011 exit transactions.
"We’re very selective about our early-stage investments," says Jay W. Schmelter (pictured), RiverVest managing director and co-founder. "Then we do everything we can to help them achieve a successful exit in less than five years."
