Healthcare PE - top shops
Hi all. I’m currently an analyst working in a healthcare group of a bb. I’m curious which funds have the best healthcare practices. Interested in terms of funds that focus strictly on healthcare (I.e a water street) and funds that focus on a range of industries but have a large healthcare focus (I.e a harvest partners). Any insight into which firms are highly regarded in healthcare would be much appreciated.
https://www.hcpea.org/current-member-firms
You can check this out while you wait for the forum's response
Just off the top of my head, here are some great shops that are not on the east/west coast.
Cressey, Excellere, Linden, Thompson Street, Round Table
What about on the east coast? Any shops that are strong in healthcare but touch other sectors as well?
Most of the big funds, Lee Equity, FFL, MS Capital Partners, Summit, WCAS, Warburg, GI Partners, Gen Atlantic
Is Lee Equity thought of as a similar caliber firm as these others funds you've listed? FFL, Summit, WCAS, Warburg, Gen Atlantic are some incredible names - is Lee Equity in that discussion? Genuinely curious because I've heard less about them
The https://www.privateequityinternational.com/pei-300/</a">PEI 300 list highlights most of the top PE firms in the world and the vast majority of the large ones have strong HC teams. When it comes to more "dedicated" firms, names to come to mind are Apposite Capital (London), G Square Capital (London), GHO Capital (London and probably one of the best in Europe), Astorg (pan-Europe) and MVM Partners (Boston and London)
Astorg is not Healthcare-focused
CVC also has quite a good track record in healthcare
True, but Astrog has a decent track record in pharma which many others do not have in healthcare e.g. Ethypharma, HRA Pharma and Nemera.
Astorg is healthcare focused. It only has three verticals: 1) Healthcare, 2) Tech and 3) Business Services
Most deals are HC or Tech. See Corden Pharma.
ArchiMed is also one only doing Healthcare although in LMM deals
Throwing in Nautic Partners' name here as well.
Thought they had poor returns? Not sure
Their healthcare returns are solid.
Edit: HC deals are above a 3x gross, so don't know in what world that doesn't count as solid to those throwing MS.
Not to hijack this thread, but does anyone have any familiarity with PE firms that operate in the life sciences space?
Not limiting PE to only mean LBOs either. Growth equity, VC, mezzanine, and royalty funds would be useful too.
Frazier comes to mind
Longitude Capital
A lot of the biotech hedge funds do privates too. Redmile group, Ecor1, Baker brothers, Perceptive. Although much of what those funds do may be considered more "VC" investing rather than growth PE.
RoundTable, NovaQuest, Hildred, CVC, Vivo
If you wanted to work in healthcare investing long term how would working at a strictly healthcare shop (I.e. a round table or Linden) compare to working at one of the top generalist pe funds listed below. Rank in regards to future opportunities at other funds
Welsh Carson is solid.
For pure healthcare Revelstoke is also a good name not on the coasts.
The corporate m&a depending on specific sector of healthcare on both the corporate development and corporate venture arm side of things is extremely built up in the healthcare space as well.
I think healthcare is one of the spaces where there is a decent opportunity to go private equity/VC out of a solid Corp dev type role as well.
I have heard terrible things about Revelstoke. Bottom feeder investors who participate in almost every process but submit the lowest offers
That didn't used to be the case. They have likely overpaid for several assets. It's portfolio is struggling if you look at the failed processes of late.
I'd question their ethics more than anything.
Nordic Capital, Permira, CVC, Carlyle.
A few multi-group funds in Chicago outside of the ones already mentioned: GTCR, MDP, Vistria. All have healthcare groups, but are not pure healthcare.
Regarding RoundTable (already mentioned several times), I knew someone who worked there several years ago. Supposedly has a great culture, but very small team size (~10 people on the investment team) and outside of Chicago (~1 hr commute to the city each way). Fund performance is allegedly top notch (upper quartile). All of this is anecdotal and somewhat dated, so others may have better insights.
If you are looking to do healthcare investing long term and had the option between MDP, GTCR, Round Table, Cressy, Water Street and Linden which would you choose and why?
MDP / GTCR are psuedo-mega funds. Water Street, Cressey, RoundTable, Linden, etc. are all VERY reputable, but also very narrow and focused. If healthcare investing is what you know you want to do, those are great firms to do it at.
Any insight into the above ?
Probably MDP, GTCR and Linden first, then Cressey then Water Street / Round Tree MDP / GTCR both good firms and have been around a while. Both HC teams are strong. Linden pays high price for stuff (not like stupid, but for sectors they like which is important for people in HC pre Covid given where valuations were) but overall good people. Their JPM hosting is pretty stylish if that matters. Cressey has some well connected people and has some good companies but in my view more LMM. Water Street bottom feeder type. Don’t know Round Tree - must be pretty LMM
What have you heard in regards to Lindens returns, culture and long term prospects compared to MDP and GTCR?
No idea - I’m just a HC banking guy and they are our clients / buyers, etc. Should say Linden check size generally smaller than MDP/GTCR I think. But I don’t have good intel on culture, pay, career progression fund by fund
MDP's returns lately have been subpar, some HC investments have performed poorly. Know a few people there currently and their reactions about working there are rather muted. The firm isn't what is used to be.
GTCR is a total sweatshop but returns are solid. Heard better things about their HC group compared to other groups (their fintech team is one of the worst on the street in terms of hours). Pay is fantastic (on par with most MF's)
Cressey is a solid firm, really aggressive on buy/build strategies and de novo platforms. Have been known to pay up in processes, and I disagree with your comment on them being LMM, they are very much a MM player. Hours tend to be a bit longer.
Linden definitely is known to pay stupid multiples (talking mid to high teens). some investments have gone well for them but i imagine the current pandemic is going to cause a lot of their portfolio to be written down in terms of valuations. Hours are sweaty, pay is pretty good I believe. They also have a pretty bad rep in the HC investing community.
Water Street is known for not really playing in auction processes, more focused on proprietary deal sourcing / getting involved in companies with some hair on them. Have done very well recently. Hours can also be a bit longer, pay is on par with other MM firms in Chicago.
Round Table (not Round Tree) is a healthcare focused fund north of Chicago in the burbs. Definitely solid returns, smaller deal teams and less structured deal investment process (work with a guy now who worked at RT for a few years). Culture is solid and hours are fine.
Why does Linden have a bad rep in the healthcare investing community? What do they say?
This is really helpful. Thanks a ton. I am also interested in HC PE out of Chicago. Do you have similar insight into a few of the other relevant names from your other post – Waud, Beecken Petty and Flexpoint Ford? Looks like Waud and Flexpoint Ford have recently or are currently raising pretty good sized funds.
Wrong. Linden is not as well regarded. Returns and their general "reputation". Also not well regarded by operators. I believe Cressey is the most credentialed firm, and has a strong pipeline to the HBS's of the world.
I'm currently at a HC focused fund (MM)
From my perspective, the MM shops that are well respected are: Five Arrows (Rothschild's PE fund), Frazier, Cressey, Arsenal, Water Street, Round Table, Vistria.
Other names that i'm familiar with that come to mind are: Beecken Petty, WCAS, Waud, Revelstoke, Flexpoint Ford, Parthenon, Audax,
Someone else posted it, but this list is pretty comprehensive: https://www.hcpea.org/current-member-firms
Do you need to be in a HC coverage group to succeed in HC PE recruiting? Thinking about going through on-cycle HC PE recruiting this fall for MM firms, but in a different coverage group other than HC.
Very strongly preferred. If you look at the junior and senior teams of most HC MM funds the majority of people will have HC coverage backgrounds.
any insight into top strictly healthcare firms in NYC? Most of the strictly healthcare firms I know are in Chicago
Not strictly HC, but think WCAS, CD&R in big side and Oak HC/FT probably most specialized / reputable in NY area w HC expertise (they do couple of other sectors)
Does anyone know how Linden’s funds have performed relative to other strictly healthcare funds? It’s interesting how they have been able to increase the size of their fund so quickly
I heard OrbiMed is a pretty solid option.
How big is their latest fund?
Unsure but you can check here: http://www.orbimed.com/en/portfolio
Consonance capital partners
Should add TPG here. Their 8th Main fund has a sidecar vehicle for Healthcare.
Anyone know how Northlane Capital Partners is in DC?
Returns at Northlane have been good AFAIK, can't go wrong with them especially with newest fundraise. I also know Martis is one of, or the best in DC that does just healthcare.
Pretty good LMM shop. Aggressive in processes, a coupe of the senior guys are very bland and lacking of personality. Junior guys are a mix (good guys or tools, no in between it seems).
Anyone have thoughts about the larger PE funds that have a HC arm like TPG, Carlyle, KKR, BX?
Bump on this -- curious if anyone has some info on the assc experience at these 4 funds, & on other firms like Permira / CVC / H&F
Will be in SF next summer working at an EB/BB on exclusively biopharma companies. I'm aware most HC PE is in the services vertical. Will I still be able to recruit at HC focused PE shops on the east-coast?
Sorry to hijack but also curious what the compensation range for healthcare structured capital / royalty funds (i.e. CRG, orbimed, oberland, marathon, athyrium, 8th street) is? And what's the pay bump look like as you get promoted?
Bump to hear more about other umm players and the healthcare arms of mfs. Would appreciate a bit of color regarding the culture of the firms/groups. Thanks in advance!
Apax, Berkshire, Gryphon, GTCR, HIG, Lindsay Goldberg, Madison Dearborn, New Mountain, THL, and Welsh Carson are some names that come to mind based on past processes.
Anecdotally, I have heard good things about the culture at Berkshire. Very well established UMM player that places extremely well into business school (HBS in particular). GTCR has historically performed very well but is a bit on the sweatier side. Junior people are more involved in the IC process than at many other comparable firms. Great comp for Chicago and experience overall. I know that 3/5 associates in one class at Lindsay Goldberg quit a year early either 2-3 years ago so you can try to read into that. Still a reputable fund, as are the other names here. Know multiple people that work at HIG – definitely a sweatshop (great returns, tend to be deep value investors aka bottom feeders) but below market compensation. New Mountain is another top notch firm. They are very active in the HCIT space and seem to employ the buy and build strategy often (and effectively...Equian was an absolute grand slam, like an 8x deal). They just raised a ~$10 billion fund; I'm not surprised by the 50%+ upsize given their success. THL flies under the radar a bit but they seem to have a reasonably robust healthcare practice (looks more pharma services focused). I think they also have a pretty good HBS pipeline (as does New Mountain). Welsh Carson is one of the biggest healthcare names in the UMM space. InnovAge was an amazing deal for them (sold to Apax actually). People here write about good hours – I've heard better than average culture for NYC but the one person I actually know who worked there got absolutely pulverized.
This was very helpful. Thank you!
What about Advent, KKR, Carlyle, and CD&R in HC?
Any knowledge on the culture of Warburg's healthcare group? Obviously heard other groups are pretty sweaty but haven't really heard anything on HC in particular
Any thoughts on Regal Healthcare Capital Partners?
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