Boston I-Bank May Seek Partner On Health Care Fund

Boutique investment bank Leerink Swann & Co. is plotting its expansion into the buyside of buyouts.

To leverage its insights into the health care industry, the Boston-based firm is looking to partner with a buyout firm or hire its own team to raise an investment fund, someone with direct knowledge of the firm’s planning told Buyouts. The firm is known primarily for underwriting health care-related offerings and producing health care-related research.

Jeff Leerink, the firm’s CEO, said as early as last July that his firm planned to launch fundraising for its own $500 million vehicle in the fourth quarter of 2007, according to a published report. 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.

Leerink and Lovell Minnick Chief Executive Jeff Lovell declined to comment for this story.

Our source said Leerink Swann is leaning toward joining forces with a fund that is already up and running, rather than hire its own investment team. The firm may form a strategic alliance in which Leerink Swann becomes a cornerstone limited partner or shareholder in a management company that’s in the buyout or hedge fund business, according to our source.

Our source said it would take a few months for the firm to decide. Either way, changes are in store for Leerink Swann. “It’s not a question of whether; it’s a question of which way to do it,” our source said. The firm would join a number of other boutiques that have investment arms, including Thomas Weisel, Cowen and Evercore Partners.

When asked why the firm was expanding, our source said Leerink has had many opportunities to make investments as part of private placements and has engaged in proprietary trading. This would be a logical step in the firm’s evolution, he said. “The company has grown larger; its position in the marketplace is stronger.”

Jeff Leerink founded the firm in 1995.—B.V.