Council Capital has launched fundraising for its fourth lower mid-market healthcare fund, setting a target of $200 million, according to an SEC filing.
If successful, Council Capital IV would be the largest fund to date for the Nashville-based private equity firm, exceeding by 33 percent the $150 million-plus secured by its predecessor in 2016.
Council Capital III was backed by institutions, including endowments and foundations, family offices, financial institutions and fund-of-funds, as well as strategic healthcare investors, including health plans.
Council declined comment on its fundraising activity.
Founded in 2000, Council makes control and minority investments in healthcare services and healthcare IT. Target opportunities typically have an enterprise value of $10 million to $50 million, revenue of $5 million to $50 million, and Ebitda of up to $7 million.
One area of specialization is investments in home and community-based behavioral and mental health businesses. Examples include CNNH NeuroHealth, a Voorhees, New Jersey-based services provider to children and young adults with neurological, developmental, learning, cognitive and behavioral issues. Council invested last year.
Other current investments include Caregiver, a Dallas-based services provider to adults with intellectual and developmental disabilities, backed in 2015 by Council and DW Healthcare Partners; and emids, a Nashville-based healthcare IT services and consulting business, backed in 2013 by Council and Baird Capital.
Earlier this year, Council sold its stake in EspriGas, an Atlanta-based medical and industrial gas supply chain manager. The company, which secured an investment in 2013, was acquired by Kaltroco. And emids is reportedly on the selling block at a valuation of up to $250 million, attracting interest from Baring Private Equity Asia, ChrysCapital and Everstone Capital.
Council’s investment strategy utilizes a body of C-suite executives in the healthcare industry who lend advice and support to portfolio companies and their management teams. The 34 members of CEO Council also invest in the firm’s funds.
Council is led by Grant Jackson, who joined in 2008 as a general partner and became managing partner in 2014. He was previously with PE firms Aurora Funds and First Analysis Corp.
Other investment professionals include GP Eric Keen, formerly with DW Healthcare Partners, Riverside Co and Norwest Equity Partners, as well as Senior Associate Taylor Weis and Associate Paul Lagarde.
Action item: Contact Council Capital’s Grand Jackson here.