Transcript TRSL Presentation

TRSL Presentation
December 5, 2005
Joseph F. Lovett
Louisiana Fund I
Managing Director
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I.
US Venture Capital
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II.
Health Care Venture Capital
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III. Venture Capital Performance
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IV.
US
Cal PERS
PRIM – Massachusetts
Louisiana Fund I
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Venture Capital in Louisiana
Team
Limited Partners
Portfolio Companies
Summary
I. US Venture Capital
1,750 Venture Capital & Private Equity Partnerships
Capitalization:
$585 Billion
Average Total Investment 1 year: $20 billion
Distribution of Venture Capital Funds, YTD Q2
2005
Health
andLife
Sciences
28%
Other
72%
$ in millions
Industry
Q2
YTD Q2 2004
Q2 2005
YTD Q2 2005
Biotechnology
$1,1012.8
$1,902.6
$1,122.2
$1,753.8
Medical Devices $509.7
$860.5
$425.7
$870.3
Healthcare
Services
$304.8
$423.4
$219.5
$341.2
Total Health
Industries VC
Dollars
$1827.3
$3,186.5
$1,767.4
$2,965.2
Total VC
Dollars
$5,983.2
$11,104.9
$5,774.9
$10,645.8
Percent of $3.0B Invested in Health
Industries by Sector, YTD Q2 2005
M edi cal Devi ces and
E qui pment 29%
B i ot echnol ogy 59%
Heal t hcar e Ser vi ces,
I nf or mat i on and Sof t war e
12%
Hot areas of Investment in Health
Care
(10 year PWC Money Tree Survey)
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Individual disease management
Cancer drug development
Genomics
Molecular Biology
Innovative drug delivery methods
Management of hospitals / clinics
Obesity / weight loss treatments
III. Venture Capital
Performance
Fund Type
1 Year
3 Year
5 Year
10 Year
20 Year
Early/Seed VC
2.1%
-2.4%
-10.5%
48.8%
20.2%
Balanced VC
11.7%
7.6%
-2.6%
18.0%
13.7%
Later Stage VC
8.8%
3.2%
-6.8%
14.1%
13.8%
All Venture
7.8%
3.0%
-6.3%
25.8%
16.0%
Small Buyouts
51.3%
8.1%
2.4%
8.5%
25.7%
Med Buyouts
29.3%
6.4%
-1.2%
10.6%
18.4%
Large Buyouts
21.4%
12.9%
3.0%
10.9%
14.7%
Mega Buyouts
26.9%
11.1%
3.6%
8.1%
11.0%
All Buyouts
26.9%
11.0%
2.9%
9.0%
13.8%
Mezzanine
9.7%
4.2%
3.2%
6.6%
9.1%
All Private Equity
20.4%
8.2%
0.1%
12.7%
13.8%
NASDAQ
0.4%
12.0%
-12.3%
8.2%
11.3%
S&P 500
4.4%
6.4%
-3.9%
8.1%
10.6%
Calpers: AIM Program
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1990- 2005
250 VC Funds
$7.2 Billion in Generated Profits
FUND
YEAR
COMMITED CAPITAL
CASH OUT & REMANING VALUE
INTERIM IRR
Alta Bio Pharma
1998
$50,000,000
$81,205,062
23.9%
Alta California Pts
1996
$100.000.000
$203,361,347
24.7%
Alta California Pts II
1998
$115,000,000
$86,087,657
(5.9)%
Alta
1996
$30,000,000
$37,247,339
5.8%
Alta V
1992
$35,000,000
$83,043,810
25.4%
Golder,Toma III
1994
$25,000,000
$514,411
24.9%
Golder, Toma V
1997
$40,000,000
$64,664,664
9.7%
Hicks, Muse II
1994
$100,000,000
$213,100,153
18.6%
Hicks, MUSE IIII
1997
$100,000,000
$61,449,392
(7.4%)
KKR European I
2001
$75,000,000
$93,677,468
20.9%
KKR Millennium
2002
$150,000,000
$88,346,041
24.9%
Perseus Seros
2001
$40,000,000
$37,342,194
13.7%
Sanderling IV
1997
$50,000,000
$81,998,441
14.6%
Thomas Lee III
1996
$100,000,000
$143,509,075
32.1%
Thomas LeeIII
1998
$100,000,000
$134,272,522
1.5%
Warburg Pincus
1990
$100,000,000
$236,300,980
14.9%
William Simon & Sons
2001
$25,000,000
$30,069,692
5.8%
State of Massachusetts
PRIM
$32.5 Billion
103 Venture Capital Funds
1986 – 1998
Returns:
Majority between 10-30%
Five Funds exceeded 50%
Biggest Winner: Menlo Ventures IV : 127%
Biggest Loser: Invexco ( a Houston oil & gas fund) (46%)
Average annual Return: 12.7% US
Thompson Venture Economics: 13.6% average
PRIM
FUND
IRR
Advent ESSF
17%
Advent GPE II
22%
Advent GPE III
7%
Advent International
5%
Advant International VI
32%
Fosrtman D&E III
5%
Fosrtman D&E IV
20%
Fosrtman D&E V
18%
Harbour Vest II
9%
Harbour Vest III
14%
Harbour Vest International
11%
KKR 1986
28%
KKR 1987
12%
KKR 1993
17%
KKR 1996
13%
NEA IV
10%
NEA VIII
34%
Tom Lee
55%
Tom Lee III
31%
Tom Lee IV
(4)%
VENTURE CAPITAL
INVESTMENTS: 1995-2004
U.S.
No. Companies
1995-2004
37,320
Investment $
$315,410,000,000
LOUISIANA
No. Companies
70
Investment $
$616,000,000*
Source: Price Waterhouse Coopers Data
*One-half invested in one oil-related company, no companies in pharmaceuticals or
biotechnology
US: Venture Capital Backed
Companies
Tandem
Compaq
Intel
Genentech
Amazon. COM
Google
Netscape
Federal Express
Oracle
Sun Microsystems
Why is there a lack of venture
capital in Louisiana?
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Tradition
Venture Capital in Louisiana historically focused on
late-stage investments
Similar to Boston in the 1980’s
Leadership Needed:
- Harvard in Boston in 1988 with Medical
Science Partners
- LSU/LED/TRSL in Louisiana in 2004 with
Louisiana Fund I
Sources in Louisiana for Early
Stage Companies
- Entrepreneurs
- Universities, Academic Medical Centers,
Research Centers and Companies
- $500-600M per year in Research &
Development Spending—50-60%
in Life Sciences
Louisiana Fund I: Overview
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Louisiana needs a local early stage
investment fund
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Create home-grown companies located in Louisiana
Attract out-of-state companies to Louisiana
Investment in existing companies
Out-of-state investment funds will invest in Louisiana
companies
LFI team experienced in working with early stage
technologies and early stage companies
Benefits to Investors and
Louisiana
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Attractive financial return on investment for investors
Louisiana Fund I catalyst for creating new industries,
companies and jobs across Louisiana
Assist local economic development efforts
Local companies based on locally developed technology
will remain in Louisiana
Attract Louisiana natives back home
Out-of-state investors will invest in Louisiana companies
Favorable publicity for investors
Louisiana Fund I:
Scientific & Business Advisory
Board
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12-15 Members
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Assist the Fund with due diligence
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Advice of key investment areas
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Serve on Boards of Companies
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Currently twelve members
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MBAs
PhDs
CEOs
-Board Members of Public Companies
-DMVs
-DDSs
Scientific and Business Advisory
Board
Current Members from
Eli Lilly
University of Pennsylvania
GlaxoSmithKline
Louisiana Tech University
Model Software
LSU Health Science Center,
Shreveport
Spirit-it Inc.
Tulane University
Aperion, LLC
Anthem Capital
Portfolio Companies
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International Mezzo Systems—Nanotechnology &
Micromachining Technology, LSU Incubator Company,
LSU licensed technology
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Patient Care Inc. – Health Insurance advocacy services,
New Orleans
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Esperance Biomedical, Pennington, LSU CAMD and
LSU AG Center, Oncology Technology—lytic peptides
for imaging and therapy for breast cancer metastases