Boston Boutique Delays Buyout Foray

Boston-based boutique investment bank Leerink Swann & Co., known for underwriting health care-related offerings and producing health care-related research, is putting plans to expand into the buyout side of deals on the backburner, a source close to the firm told Buyouts.

CEO Jeff Leerink said in July 2007 that the firm, which he founded in 1995, planned to launch fundraising for a $500 million buyout fund in the fourth quarter of that year. That announcement came on the heels of a $35 million investment in Leerink Swann by LBO shop Lovell Minnick Partners. At the time, Leerink said his firm wanted to profit from its expertise in health care. In February of this year, a source familiar with the fund’s plans said the strategy had shifted a bit, with Leerink Swann looking to partner with a buyout firm or hedge fund, or hire its own team to raise a fund.

The firm still plans to invest in buyouts, just not anytime soon, our source said, because of turbulent market conditions and a difficult fundraising environment. Our source had two meetings planned in New York this past week with potential partners, but said “quite frankly it’s just not a priority.” In the meantime, he said, Leerink Swann will concentrate on its health care-related advisory services.

Back in February, our source said the firm may form a strategic alliance in which Leerink Swann becomes a cornerstone limited partner or shareholder in a buyout or hedge fund business. Now the firm is looking more closely at partnering with a health care-focused hedge fund, as opposed to a buyout firm, our source said. The firm would join a number of other boutiques that have investment arms, including Thomas Weisel, Cowen and Evercore Partners.