Baigo Capital launches for healthcare

Sal Oppenheim, a European private bank, has provided cornerstone funding alongside a family office to launch Baigo Capital, a Frankfurt-based private equity firm focused exclusively on Europe’s healthcare sector.

Markus Bracklo, a partner at Baigo Capital and former head of healthcare investment banking at Sal Oppenheim, said that the new firm would not be competing with the likes of Nordic Capital and Apax Partners, which bought Swedish healthcare services firm Capio for €1.83bn in October last year.

“We are a mid-market focused player,” said Bracklo. “We are focused on the double to low treble-digit million euro deals.” Based in Frankfurt, Baigo Capital will invest in European healthcare businesses with enterprise values of between €40m and €200m.

To-date, the firm has received €100m in cornerstone investment from Sal Oppenheim and an unnamed German family office and is in the process of raising a further €200m to be invested in about 10 businesses in pharmaceuticals, medical devices, drug and dental distribution and care homes.

The firm’s geographical focus, added Bracklo, would primarily be “German-speaking Europe, in particular Germany and Switzerland, Nordic territories like Sweden and Denmark, and France”. He said that he could envisage expansion in the future, with offices in other European locations, but that at present a Frankfurt site would suffice.

Bracklo launched the venture alongside Frank Duffner, former head of healthcare M&A at Sal Oppenheim; Dariusch Mani, formerly at Schering; and Markus Solibieda, previously at Deutsche Beteiligungs, Advent International and 3i.

The founding partners will also be supported by an advisory board comprising David Ebsworth, former global head of pharma at Bayer; Ulf Fink, former German member of parliament responsible for healthcare reform; Antoine Flochel, deputy chairman of the Ipsen Group; and Oillii Rikkala, former CEO of Instrumentarium and senior adviser to GE Healthcare.

The firm had come about due to “a feeling of real opportunity for sector-focused funds in Europe, with healthcare set to benefit”, said Bracklo, who pointed to the success of a number of such funds in the US.

Opportunities for investments in the sector will be enhanced, he said, by demographic developments, technical and organisational innovation, as well healthcare reforms, privatisations and regulation.

The latter, agreed Bracklo, would be a challenge. “Healthcare is a regulated industry,” he said, “and that regulation tends to differ from country to country. So it is extremely important to understand national differences, and that’s what we believe a sector-focused fund can offer more readily than a generalist.”