The fund will seek to invest in early stage companies but also look for more mature targets in order to balance risk and reward (from seed to series C).
Ireland’s first ever private equity medical cannabis fund has been given the green light by the Central Bank of Ireland and is seeking to raise up to €150m to back companies in the legal medicinal cannabis industry.
Óskare Capital SAS, a French investment advisor that specialises in private equity, venture capital, cannabis, and medical and biotechnology related products and strategies, is leading out the new venture with Crossroads Capital Management Limited (CCM).
The private equity Óskare Fund is offering private investors the chance to put at least €100,000 into a portfolio based on the research, development and sale of cannabis-based products – but only for medicinal purposes. It has become the first such fund to be domiciled here.
“Our cross-practice cannabis industry team was formed primarily to help our clients navigate the regulatory uncertainty in this rapidly growing industry”
CCM and Óskare Capital were advised on the transaction by Eversheds Sutherland’s cannabis industry team.
In recent years, investors have pumped billions into such funds in North America in line with legalisation of cannabis for both medical and recreational purposes. The North America legal cannabis market amounted to almost $14 billion in 2019, growing by roughly 30 percent on the previous year.
It is estimated that the legal cannabis market in Europe will exceed €15 billion by 2029 with sales of legal medical cannabis reaching €316m in 2018.
“The potential for this kind of investment is massive”
The prospectus describes the fund as “a long-term, potentially high-risk investment which is suitable only for sophisticated institutional and high-net-worth investors which are able to bear the risk of losing the entirety of the value of their shares”.
Deborah Hutton, partner and head of asset management and regulatory team at Eversheds Sutherland’s Dublin office, said; “Our cross-practice cannabis industry team was formed primarily to help our clients navigate the regulatory uncertainty in this rapidly growing industry.
“With our ever-increasing industry and regulatory knowledge, we were delighted to provide comprehensive guidance and our insights throughout the formation of this unique fund, intended to deliver wide-reaching benefits for its stakeholders.
“Dublin is one of the world’s largest venues for managed funds and particularly for the more unusual asset classes. The potential for this kind of investment is massive,” she concluded.
The Óskare-CCM strategy is to invest primarily in unlisted cannabis-related companies with a broad global exposure to the cannabis industry.
By Stephen Larkin
Published: 12 June, 2020