Whiz Partners Inc., a Japanese investment-management firm, plans to start its second health-care fund that will invest in companies with potential to benefit from aging societies.
The fund will start as early as October and invest in convertible bonds and warrants of about 10 health-care companies, with market capitalizations of as much as 50 billion yen ($491 million), said Managing Director Tomoyuki Fujisawa. Tokyo-based Whiz plans to raise as much as 15 billion yen by the year-end and up to 30 billion yen by June 2015, targeting an annual internal rate of return of 35 percent for seven years, he said.
Whiz plans to capture rising demand for capital among health-care related companies in Japan as they seek to expand their businesses abroad. Its first fund, which has a similar strategy and was set up in April 2011, raised 5.3 billion yen and had an internal-rate of return of 371 percent as of March 2014, Fujisawa said.
“Mid-to-small companies are struggling with their global expansion strategy so they welcome the kind of investment style we have,” Fujisawa said in an interview in Tokyo yesterday. “There are still lots of undervalued companies.”
The new fund will invest in listed and non-listed health-care-related companies such as a makers of testing equipment, tissue engineering companies and preventive health-care providers, in addition to biotechnology ventures, which the predecessor fund invested in, Fujisawa said. It also plans to invest in health-care units of major publicly traded companies that the parent companies are seeking to spin off, he said.
When the fund wants to exit some of the companies in which it has invested, it will consider converting bonds the fund holds into shares of the parent companies or taking the invested companies public, he said.
The first fund has invested 4.8 billion yen into listed biotechnology companies including NanoCarrier Co., Symbio Pharmaceuticals Ltd., Gene Techno Science Co. and Cellseed Inc. as well as closely held NanoDex Inc., Fujisawa said.
“We received several inquiries from major companies that are seeking to carve out their divisions,” said Fujisawa, who was formerly a researcher at Takeda Pharmaceutical Co.