Burrill fund frustrated by lack of local support

The Burrill Australia Life Science Fund has raised AUD$150 of its planned $200 million venture capital fund in just over a year -- but more than half of it comes from overseas institutions.

Hopes are high that the fund will close next month, but its managing director, Peter Carre, has been frustrated by lack of support from Australian institutions. "Until all the documents are approved in every respect -- and the money is 'in the bank' so to speak, then it's not done," he said.

"[So far] more than half the money has come from overseas institutions. Australian institutional support has been very disappointing."

Carre attributed the dearth of support to a lack of knowledge among Australian institutions about biotechnology.

He said that although foreign investors required education about Australian research and opportunities, they had a sophisticated understanding of how money was made in the biotechnology sector. They are keen to invest in Australian biotechnology, which they see as a 'fresh' market, which has yet to be optimised.

"Our goal is still $200 million, but as we stand today we're at roughly $150 million. The fund is still open," Carre said.

He said comprehensive due diligence of the companies in which the fund will invest was likely to begin in August.

The Burrill Australia Life Science Fund was launched last June by San Francisco-based life-sciences merchant bank Burrill & Co, on the back of reforms to Australia's venture capital tax laws. Burrill & Co venture capital funds currently have more than US$500 million under management internationally.