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Israeli Vitalife fund closes at $50m

The Israeli life sciences firm, Vitalife Life Sciences Ventures, has held a $50m final close for its inaugural fund. The fund held a $30m first closing in April 2002 but has since received a significant commitment from US fund of funds manager HarbourVest Partners.

HarbourVest joins Vitalife's existing investors, which include Discount Capital Markets and Investments, SCP Private Equity Partners, Boston Scientific and Evergreen.

Vitalife targets small start-ups in the life sciences sector, specifically medical device companies. The firm has already invested $15m of the fund's total capital in ten ventures, including MediGuide, SightLine, Procognia and TransPharma.

Israel's venture capital industry has been hit hard by the double effect of a global economic down turn and geo-political tensions in the Middle East. The result has been sluggish fundraising conditions over the last 18 months.

Between 2000 and 2002 $4.6bn of private equity capital has been raised in Israel but only $63m was raised last year. The return of capital actually outpaced new capital raised in 2002, producing a net negative inflow of $128m.

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