Catalio Capital Management closes $100M venture fund

Catalio Capital Management, a Baltimore-based investment firm focused on biomedical technology companies, said Tuesday that it closed its second venture fund with $100 million.

The fund, called Catalio Nexus II, was oversubscribed. Backed by investors in private equity, hedge funds, institutional family offices and foundations, the fund closed at its hard cap, which is the maximum allowed to be raised.

This follows the first Nexus fund, which closed in late 2017 at $15 million. In June, managing partners George Petrocheilos and R. Jacob Vogelstein launched the firm after spinning out of Inner Harbor private equity firm Camden Partners and transferring existing funds. The fund that closed recently is the first since the spinout.

“It is incredibly rewarding to be able to directly partner with the world’s most successful scientist-entrepreneurs to translate their basic research into commercial ventures that enhance the lives of millions of patients around the globe,” the managing partners said in a statement. “We truly believe that investment in the life sciences and biotechnology sectors has never been more critical and we continue to see an incredible opportunity for growth in these businesses.”

In all, the firm raised nearly $150 million and invested in 20 companies. Catalio’s investments this year include Baltimore-based regenerative medicine company LifeSprout and cancer genomics company Personal Genome Diagnostics, as well as Thrive Earlier Detection Corp., a cancer testing company which was founded out of Johns Hopkins and is growing a Baltimore R&D presence following this year’s $257 million Series B round. While the fund is now closed, venture capital firms are allowed to make investments from a fund prior to a final close. It has also invested in recently IPO’d COMPASS Pathways, which is using hallucinogenic mushrooms for mental health, and drug discovery platform Recursion Pharma.

Catalio’s model includes referrals from a network of more than 25 venture partners. They are scientists with experience starting and building companies, and many are from Maryland institutions like Johns Hopkins. Dr. Freda Lewis Hall, who recently retired as executive VP and chief medical officer of pharmaceutical firm Pfizer, joined as the most recent venture partner.

Catalio’s chairman is Edward J. Mathias, who played a founding role and served on the board of D.C. private equity firm The Carlyle Group. The leadership team also includes general partners Tom V. Brooks, a former executive at Goldman Sachs and Baltimore’s Constellation Energy, and Dr. Kenan Turnacioglu, who previously led healthcare investments at Duquesne Capital Management, the firm founded by investor Stanley Druckenmiller.

Catalio is now opening an additional office in New York as it continues to grow its team of a dozen people.