Markets
OrbiMed

OrbiMed Closes Fifth Healthcare Fund

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OrbiMed Advisors has closed its OrbiMed Private Investments V with just over $735 million, including $36 million from the general partner. Fund V will invest in all stages and sectors of the healthcare industry, with a focus on biopharmaceutical, medical device and diagnostics companies in North American and Europe. Investors in the fund include some of the largest endowments, foundations, sovereign wealth funds and financial institutions globally. OrbiMed Advisors is an long active investor in equity private placements into emerging growth biotechs and medical device companies. Recent investments include Exact Sciences Corp (EXAS), ADADIA Pharmaceuticals (ACAD) and Aerocrine AB (AEROB:SS).

Markets

North Bridge Raises $580M for Second Growth Equity Fund

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Boston-area based North Bridge Growth Equity has raised a second growth equity fund, announcing it has more than $580 million in committed cash to bankroll emerging growth companies that have a technology focus. This brings North Bridge Growth Equity’s total capital under management to more than $1.1 billion. North Bridge Growth Equity II will continue its strategy of investing primarily in privately held, technology and tech-enabled businesses that are entrepreneur owned and managed, and have grown to tens of millions in revenue with little or no outside capital. North Bridge’s growth equity arm launched in 2007 with a $545 million fund. It lists 12 portfolio companies for that fund including publicly traded parts manufacturer Proto Labs (NYSE: PRLB) and Manchester, NH-based Dyn, a provider of online services such as DNS and e-mail delivery.

Markets

DTC Lifts Veil on Chills

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In a significant policy shift, the Depository Trust Company has issued a white paper outlining procedures that issuers can to take to avoid or remedy security deposit chills and global locks. The blueprint, “DTC Service Restrictions on Certain Book-Entry Securities – Procedures for Affected Issuers,” arrived 18 months after the Securities and Exchange Commission directed DTC to establish rules giving affected issuers due process. The order resulted from an administrative appeal to the commission by International Power Group (IPWG) after it was subject to a deposit chill in 2009. 

The DTC institutes deposit chills – a refusal to accept further securities for book entry from an issuer that can include some further service restrictions – when it suspects that a prior deposit comprised securities that aren’t freely transferable. It imposes a global lock – a shutdown of all services – when “definitive evidence” exists that securities are restricted, such as a regulatory action against an issuer alleging an illegal transfer of the shares. In the white paper, DTC provides a broad overview of its new policies, from how it intends to notify issuers of actions and the process companies would follow to clear them, to the introduction of an automatic cessation of a global lock after six months or a year, depending on whether an issuer reports to the SEC and other circumstances.

Markets
crowdfunding

Advertising Poised to Shake Up Emerging Growth Capital Markets

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The end to the ban on general solicitation in private securities offerings has ushered in an extraordinary capital markets transformation that could lead to more capital for small companies and startups, more investment opportunities for accredited investors, and more fraud. Observers compare the change to when securities trading eventually moved from the realm of broker-dealers to online trading platforms like E-Trade and Charles Schwab amid the ramp up of the Internet and other technological innovations. “We’re really on the verge of a paradigm shift as to how transactions are marketed, and it is because of this regulatory change,” said chief JOBS Act promoter and pioneer David Weild IV. “It will take a little bit of time, but the good news is that general solicitation has everybody talking about equity and small companies, and small companies are where jobs are created.”

Preparing for Change

The JOBS Act directed the Securities and Exchange Commission to end the ban on general solicitation under Title II, and market participants have wasted no time positioning themselves to take advantage of the newfound freedom. Companies and investment funds have already filed dozens of Form Ds indicating that they’re going to market their private offerings to the public.