Visionary Ventures, which was co-founded by the Octane accelerator a decade ago, is aiming to raise $250 million for its third fund.
The Newport Beach-based firm previously raised $30 million for its first fund and about $150 million for its second fund.
“Nobody’s ever built a venture fund like this before and it really worked beautifully,” Managing Partner Jeff Weinhuff said in a June 27 presentation at the Balboa Bay Club in Newport Beach.
“We’ve done extraordinarily well at actually getting investors their money back and there’s a lot more to come.”
Visionary Ventures said it’s made about 45% of all investments in the ophthalmology industry in recent years. The funds have had notable successes in the past decade, including Irvine-based Tarsus Pharmaceuticals Inc., which now has a $1.6 billion market cap (Nasdaq: TARS), and Aliso Viejo-based RxSight Inc., which has a $323 million market cap (Nasdaq: RXST).
The announcement, made at Octane’s Ophthalmology Tech Forum, is an indication that they believe the first two funds have performed to investors’ satisfaction.
“Visionary is the most active investor in the eye,” Weinhuff said.
“We have an unusually high success rate at 75%.”
Institutional Investors Wanted
The first fund – attracted mostly physicians and some high-net-worth individuals – returned about 18%. The second fund, which has expanded beyond ophthalmology to cardiovascular and neurovascular investments, is thus far up 7.4%, attributing the slower than expected growth to COVID-19 and higher interest rates. Weinhuff said the funds’ overall performance has been about two to four times over the top quartile performance of other venture funds in the U.S.
Bill Carpou, the chief executive at Octane who in 2015 helped start the venture firm, said Fund 2 began attracting institutional money.
“Some of them just put their toe in the water, basically look at it and say, okay, let me see this and I think they like what they saw,” Carpou said.
“The idea is that given our performance, we want more institutional investors.”
Visionary Ventures says its objective is to utilize its location and information advantage through partnerships with eye doctors to achieve exceptional returns in both medical devices and drugs. Its website lists at least 74 doctors in the anterior and retinal industries who are what they call key opinion leaders, also known as KOLs.
The fund has invested in areas like cataracts, corneal blindness, dry eye and glaucoma.
Orange County is “the global headquarters of ophthalmology” with over 80 companies that contribute about $12.5 billion annually to the local economy, the firm’s website said.
Weinhuff has been active in the private equity realm for over 30 years, including executive roles at Jefferies & Co. and as a partner at Drexel Burnham Lambert. He helped prepare Tarsus Pharmaceuticals for its successful initial public offering in 2020.
The three other partners at Visionary Ventures also have vast experience in ophthalmology and private equity.
• Daniel Gil, who has been issued more than 70 U.S. patents during a 30-year career in the pharmaceutical R&D industry, is currently CEO of Pelage Pharmaceuticals, which is developing a topical hair growth treatment.
• Perry Sternberg has worked more than 15 years in executive roles at Novartis, Bausch & Lomb and Shire, where he was responsible for the U.S. commercial organization and managing the company’s product portfolio in five franchises.
• Chief Financial Officer Garrett Hamontree was previously CEO at Bridgemark, where he led investments in both private equity and debt.
Most Promising
Executives said the most promising current investments are:
• Orasis Pharmaceuticals treats presbyopia, or nearsightedness, which is ubiquitous around the world.
• Sydnexis is a clinical stage pharmaceutical company currently in the middle of a Phase 3 study for the treatment of myopia, which is expected to affect 5 billion people by 2050.
“Sydnexis is one and only treatment for pediatric progressive myopia,” Weinhuff said. “It can be treated early; everything else has failed.”
• Pelage is a clinical-stage biopharmaceutical company looking for breakthroughs to activate hair growth. In June, the company announced positive results from its Phase 2a clinical trial.
“We are so thrilled to see the Phase 2a result that came out last week that it actually works — it does grow hair,” Weinhuff said.
“We think that’s a really spectacular group of companies.”