China: Frontline BioVentures-WuXi Healthcare merger to create $800m fund

Chinese venture capital firms Frontline BioVentures and WuXi Healthcare Ventures have agreed to merge to form a healthcare investment group named 6 Dimensions Capital, which will have combined assets under management (AUM) of RMB 5.5 billion ($800 million).

The new entity, which is likely to be one of the largest healthcare-focused investment firms, will also start raising new RMB and USD-denominated funds in the near future, according to an official statement.

As per the terms of the agreement, Ge Li, the founder, chairman and CEO of WuXi AppTec, and a founding partner of WuXi Healthcare Ventures, will become chairman of 6 Dimensions Capital’s board. Meanwhile, Leon Chen, the founder and managing Partner of Frontline BioVentures, will become the CEO of the company.

The new investment team will comprise 24 investment professionals, including seven Partners and seven Venture Partners.

Founded in 2012, Frontline currently manages two RMB-denominated funds and one USD-denominated fund, with a combined AUM of RMB 3 billion ($435 million) and a portfolio of around 20 companies.

On the other hand, WuXi Ventures, which was established in 2011, manages two USD-denominated funds with a combined AUM of $350 million and has invested in close to 40 companies.

The teams complement each other well, as Frontline has a more established venture investment exposure in China, while WuXi Ventures has a clear advantage with its access to innovative startups in the US, the companies said in a joint statement. The merger will create a powerhouse to fund innovation in an optimal position to capture the biggest value appreciation on both sides of the Pacific, it added.

“I believe at this new and elevated starting point, 6 Dimensions Capital will be equipped with economies of scale in deploying capital and resources, and further strengthen our deal sourcing and risk control capabilities. 6 Dimensions Capital aims to not only generate even larger value for our investors, but also favorably contribute to healthcare industry development in China and in the US at multiple dimensions,” said Leon Chen.

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