Answers to the most popular questions
We prefer opportunities where we can expect a holding period that is below five years, but in certain cases we are willing to support companies up to the most adequate exit.
The fund will typically invest USD 10-30m over the lifetime of an investment through multiple rounds. We always ensure that we have reserves if required, and we can provide guidance on securing additional financing, as well as bringing in other investors from our network. Beyond capital, we support companies in different ways such as providing strategic and operational expertise, sharing insights into the sector and financial markets, and leveraging our broader network, including for example KOLs.
We invest in transformative healthcare technologies that can significantly improve patient outcomes or streamline healthcare delivery. Specifically, we invest in medical devices, diagnostics and digital health. We invest in growth stage, commercially ready companies that are either already on the market or have a predictable path towards market entry. Where relevant, a regulatory approval should have been secured in one or more geographies.
Although we traditionally invest in later-stage companies, we are happy to review and track earlier stage opportunities to develop a relationship and invest when the time is right.
We generally look to hold a stake of 10-25%. We usually take a seat on the board of directors to ensure we have a complete overview of the business and can bring value, for example, in providing access to our network or giving strategic guidance. We understand the importance of building an exceptional board that will drive a business to success.
Most of our investments have been in the US and Europe, but we don’t restrict ourselves by geography and will consider proposals that meet our investment criteria regardless of where the company is based.
We approach it from several angles. We apply valuation techniques specific to young companies such as the venture capital method, cash flow valuation or earnings valuation. We also compare the potential deal with other companies and their typical market valuation. Finally, we undertake a qualitative assessment of the operational elements of the company. This could include the experience of the management, the development stage of the organisation or the clinical impact or uniqueness of the product.
We focus on building fully-fledged standalone companies capable of reaching >USD 100m in annual revenues. However, as is common in healthcare, private specialised companies are often acquired by global strategics through a trade sale which provides an exit opportunity. A company may also be a good target for a public offering allowing us to exit or cross-over our investments into public markets. Three of our portfolio companies became publicly traded companies in 2021. Reviewing potential exit scenarios is a key part of our due diligence before investing in a company.
In 2016, we closed our first fund dedicated to medtech and digital health, Endeavour Medtech Growth (EMG) LP, with a total fund size of USD 280m. In 2021, we closed EMG II LP with a total committed capital of USD 375m. EMG II LP is focused on investments in medical devices, diagnostics tools and digital health.
ESG is a sustainable investment practice that considers the impact and risks of environmental, social and governance (ESG) factors, as well as potential financial return in a project or company. To provide an ESG score, independent rating agencies will evaluate company practices and risk profiles. An organisation with a high ESG rating indicates good practices that manage environmental, social and governance risks well. Such companies should experience fewer setbacks and provide investors with a more stable long-term financial reward than those with a poor ESG score.
What are the differences between ‘ESG investing’, ‘impact investing’ and ‘socially responsible investing’?
All three terms refer to different types of sustainable investment and can be distinguished in the following ways:
- ESG investing aims to create long-term wealth by focusing on core environmental, social and governance criteria. This is based on the premise that companies employing such focused and sustainable business practices tend to generate better financial returns.
- Impact investing intends to deliver positive social and environmental impact alongside financial returns by investing in businesses and organisations with a positive social mission.
- Socially responsible investment (SRI) is sometimes used as a broader term, which encompasses ESG and/or impact investing. However, it can also narrowly refer to an ethical investment strategy that uses defined criteria to exclude potentially damaging social and environmental investments from a given fund (e.g. tobacco, alcohol, firearms, fossil fuels) and is widely available in public markets.
Endeavour Vision is a signatory for the UN Principles for Responsible Investment and is committed to assessing and reporting on our activities on an annual basis. As part of this, we undertake pre- and post-investment ‘ESG health checks’ on all our portfolio companies – assessing their strengths and weaknesses and working together on company strategies to adopt sustainability practices and improve ESG performance.
Endeavour Vision only invests in companies that we believe will have a positive impact on patient care, that work to modernise and strengthen healthcare systems, and improve societies as a whole. If you would like to learn more about our investment activities, you can download our latest impact report here.
By definition, companies with a higher ESG rating are less prone to risk. This means reduced market volatility, greater resilience to market downturns, and less uncertainty. Critically, companies that are committed to improving their ESG score are also working to promote positive environmental, social and governing practices that help make the world a better place.