IRELAND - The National Pensions Reserve Fund (NPRF) has teamed up with the Irish government for a joint $37.5m (€29m) commitment to a US healthcare fund.

The $12.5m commitment to Sofinnova Ventures from the NPRF comes as the fourth investment to support the government's Innovation Fund, having last committed €125m to the scheme.

Sofinnova Ventures Fund VIII will target existing companies and start-ups in the life sciences sector, with part of the agreement seeing it establish an office in Dublin.

Paul Carty, chairman at the NPRF, praised the US company.

"Sofinnova is a market-leading life science venture firm with a strong track record, and the NPRF is pleased to be able to support Innovation Fund Ireland in a way that meets our commercial investment criteria," he said.

Sofinnova managing partner Mike Powell said he welcomed the NPRF's investment - alongside Enterprise Ireland's $25m contribution - that would see both becoming two of the fund's limited partners.

Over the last few years, the NPRF has been repeatedly attacked for not focusing more of its investment on Irish projects, with the National Treasury Management Agency recently indicating that it would soon look to support local small and medium-sized companies, as well as infrastructure projects.

Irish minister for jobs, enterprise and innovation Richard Bruton said he viewed the investment as an opportunity to develop a venture capital industry in Ireland, saying it was a "key part" of the government's strategy.

"Venture capital funds provide crucial funding, as well as mentoring and advice, to early-stage, high-potential companies in key high-growth sectors," he said.

"That is why the programme for government outlines the government's determination to support the development of a more dynamic venture capital industry in Ireland by seeking to attract top-tier venture capitalists to invest in Ireland."

The NPRF first committed €30m to the Innovation Fund Ireland in October 2010, with €20m being invested in the DFJ Esprit Fund III and the remainder in DFJ Fund X, with the companies having previously backed DVD rental website Lovefilm, now owned by retailer Amazon, as well as Skype with initial capital investments.