Apax Disbands Healthcare Team
Apax Partners has decided to halt new investments into health care assets as the private equity firm sees fewer opportunities in the industry.
The buyout firm will no longer have a dedicated health care team as a result and reassign almost all of the members to other roles, according to an update to its limited partners seen by Bloomberg News. Andrew Cavanna, one of the firm’s partners overseeing health care investment, has become head of investor relations for Americas, according to Apax’s website.
Apax said the remaining health care portfolio companies will continue to be managed by the broader team, while the firm will keep investing in “health care-adjacent” businesses.
“Business quality in health care is more variable due to reimbursement and regulatory pressures, supply shocks, capex intensity, and ‘stroke-of-the-pen’ risk, among other factors,” Apax Co-Chief Executive Officers Andrew Sillitoe and Mitch Truwit said in the investor note. “The heterogeneity of the sector has also provided fewer opportunities for us to leverage our repeatable playbooks.”
Apax has raised $80 billion in capital with offices in New York, London, Hong Kong, Mumbai, Munich, Shanghai and Tel Aviv, its website shows. The private equity firm will focus exclusively on the technology, services and internet consumer sectors going forward, according to its update.
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Interesting, it looks like they’ve allocated the team to services and tech which will have organisational impact as a bunch of principals in those teams have more people to compete with for partner slots.
healthcare is interesting at the MFs - if you go on Advents portfolio they haven’t completed a European healthcare deal in 5 years yet have a large European team presumably all making serious cash - makes you wonder
Know for a fact MFs like BX, Advent are not investing in HC services going forward for sure just given the reputational / regulatory risks
it makes sense to shift into tech and services. consumer internet have like 3 people each at the partner / principal / vp level for very little investing they've been doing (wonder if they are next to lean out), tech is even more bloated as they technically have digital as well, services was lean to begin with
Advent European HC team is very small barring on non existent
You’re may well be right but just was looking outside in - if you filter their team by “Europe” and “healthcare” I count 18 people - but could just be that all of these people work on several industries (despite many of their bios saying they focus on HC)
They had a couple of dogs in that portfolio. Kepro was trading in the 60s last time I worked on it just prior to the sale. Not surprised.
At a MF and our healthcare team is struggling to deploy in the last few years as well. Feels like this could turn into a similar situation as the consumer teams that got canned across the board (e.g. Carlyle)
Expected given how they'd been performing sadly. I don't doubt a bunch of other groups will follow suit across the UMM/MF firms.
hc has been the 2nd best performing industry behind only tech in pe for the last decade or so
im surprised by some of the comments here affirming their decision
Probably depends on what sectors of healthcare the firms were investing in. Traditional provider businesses in MSO - PC structures that were the bread and butter of healthcare PE are going to be tough for a while given regulatory / social headwinds. Lot of people piling into pharma services and HCIT though.
Just want to get a sense from the more experienced PE folks here - do you think the disbanded HC personnel will really stay with Apax and grow into their new roles, or will they find other HC roles/get pushed out gradually by Apax?
Just asking cos I know if it was my firm, virtually all the ex-HC folks would be announcing their departure within a few months, one way or another. Seeing this happen now in fact...
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