Cambridge Innovation Capital (CIC) is a venture capital investor with a focus on deep tech and life science businesses with roots in the University of Cambridge or the wider Cambridge network. It has now successfully closed its second fund (Fund II) and raised £225 million.
Fund II was oversubscribed, with investors drawn from a geographically widespread group of around 50 institutional and strategic investors. Almost half of the capital raised was put forward by UK-based investors. With the completion of Fund II, CIC now manages upwards of £500 million, endowing it with greater means to support its portfolio companies throughout their life cycles. CIC has invested in 40 deep tech and life sciences companies to date, with Fund II already having made six investments.
The Fried Frank team was led by corporate partners Sam Wilson and Kate Downey and comprised partners Gregg Beechey (regulatory), Michelle B Gold (tax), Nick Thornton (tax) and Kathryn Cecil (finance), as well as associates Ethan Chionh (corporate), Nicholas Sullivan (corporate), Joanna D Rosenberg (regulatory), Zac Mellor-Clark (regulatory), Nishkaam Paul (regulatory), David Federgrun (tax) and Thomas Bramall (tax). The team was also supported by Pritha Sordi.
Lawyer Monthly had the pleasure to speak with Sam Wilson, Partner at Fried Frank to give us some further insight into this transaction:
Please tell us more about your work during the fundraising round.
When we first sat down with CIC to discuss the fundraising, they gave us a very clear mandate to develop a fund structure and set of terms that would make the fund accessible and attractive to institutional investors on a global basis. The outcome of the fundraising and the breadth and quality of the LP base are testament to the success of that.
What specialised skills and experience did your team bring to the operation?
With a dedicated fund formation practice operating across multiple strategies and asset classes, Fried Frank’s London office was able to bring to bear not only a long track record of working with UK-based venture capital sponsors, but also experience and expertise garnered in other areas, such as devising currency solutions to assist non-UK investors committing to a sterling focused fund.
Were any challenges encountered in the course of the fundraising? If so, how did you and your team overcome them?
You will not be surprised to hear that the advent of the COVID-19 pandemic just prior to the launch of the fundraising presented probably the biggest challenge – for example, for CIC in terms of its ability to meet prospective investors (including those in and around Cambridge itself), and for us with even some of the most basic steps we usually take for granted, such as getting new partnerships registered at Companies House. Patience and perseverance paid off in the end.
What does the successful establishment of Fund II mean for CIC and for Cambridge-based science and technology organisations?
CIC has only been operating since 2014 but it has already established itself as one of the key players in the deep tech and life sciences investment sector in and around Cambridge. Whilst CIC has unique access to opportunities in these sectors that have their roots in the University of Cambridge, CIC’s mandate is much broader than that, and this significant new capital raised will give CIC the opportunity to support upwards of 30 additional businesses operating – or with ambitions to operate – in the Cambridge region.
Patience and perseverance paid off in the end.
How does your work during this transaction fit the profile of your firm?
As I mentioned earlier, whilst we have deep experience forming UK venture funds, our practice in London and globally is much broader than that. We have a significant focus on global asset managers and private capital sponsors across multiple asset classes and strategies, including equity, credit, infrastructure, energy and renewables, real estate, seed and stakes, and impact, as well as for clients who are increasingly looking to offer liquid/semi-liquid structures alongside the illiquid products more traditionally associated with private markets. Our sponsor clients also look to us to support them across all aspects of the development and evolution of their fund management businesses, not just capital raising. We find the breadth of our client base and our asset class coverage to be a real distinguishing feature when talking to clients, allowing us as it does to bring our expertise from one area to bear on another.
Do you expect to continue your work with CIC on future projects?
We would be delighted to continue to work with CIC on future projects. They are a fantastic team to work with, and given the scale of their ambitions for the development of the CIC business I have no doubt that such opportunities will arise.
