It’s a Healthy Market Out There Right Now

These days, raising money for anything health-care- related in Southern California is almost as easy as shooting fish in a barrel.

Just ask Steven A. Kriegsman, a financier for young medical, biotech and pharmaceutical companies. A former CPA with KPMG Peat Marwick, Kriegsman runs the Kriegsman Group, a Pacific Palisades investment boutique company with eight employees.

The 7-year-old firm is forming a $50-million venture capital fund that will invest primarily in growing health-care companies that are already publicly traded. Driven by rapid growth that has made many early investors in health care rich, the sector should continue growing through much of 1997, Kriegsman said.

“It’s spectacular--our business has exploded,” said Kriegsman, who added that venture capital has come back to the Los Angeles market as investors who have already made money in health-care ventures look for new opportunities to reinvest. Investors have “made a lot of money and they need to recirculate it,” he said.

Kriegsman said he considers deals from about 1,000 companies each year, a majority health-care-related, but only selects about eight financings. His latest is a Northern California company called Calydon Inc., which is developing a new treatment for prostate cancer, a disease common to men over 50. Kriegsman is attempting to raise $10 million for the Menlo Park-based company through private sources. The firm could eventually go public, he said.

Other companies Kriegsman has helped finance are Novoste, a single-use medical-device company based in Norcross, Ga. He advised Tri-Point Medical Corp., a company that has developed a new product for closing minor wounds and incisions.

In addition, Kriegsman helped raise $22 million for Advanced Tissue Sciences, a publicly traded medical device company in San Diego that makes products for burn victims.

Kriegsman helps finance other industries as well. He recently raised $5 million in private capital for Walking Co., a Ventura shoe firm started by James P. Argyropoulos, the founder of clothing maker Cherokee.

Other investment bankers are scrambling to penetrate the health-care market. Major Wall Street giants Merrill Lynch & Co. and Goldman, Sachs & Co. each have their top investment bankers for health care here.

On the Lookout

One of the nation’s oldest and most active venture capital firms is looking for more opportunities in Southern California. Weiss, Peck & Greer Venture Partners, a 23-year-old San Francisco firm that has managed more than $400 million in 150 companies, is looking to invest in more technology-based and health-care companies.

“Southern California is a growing area of focus,” said Gil Cogan, co-managing partner with the firm, which has just raised $190 million in a new fund to invest in technology and health-care companies.

In Los Angeles County, the company has invested about $7 million in Panorama Software, a Woodland Hills provider of disaster-recovery systems.

“We look mostly at the management team, and we stay with them for the long haul,” said Cogan.

Debora Vrana can be reached via e-mail at [email protected] or by fax at (213) 237-7837.