Patient Square Capital, the firm formed by ex-KKR healthcare chief Jim Momtazee, is on track to raise one of the largest-ever first-time private equity funds with its debut effort, sources told Buyouts.
Patient Square is telling potential investors it could raise around $3 billion for the pool, sources said. The fund just went live on the market around February 1, sources said. Park Hill Group is working as placement agent on the fundraising.
At $3 billion, Patient Square’s debut would be among the largest ever first-time private equity funds raised. Another record first-time fund was raised by Arcline Investment Management, which closed its first fund on $1.5 billion in 2019.
Such a large haul would be significant for a few reasons, including that emerging managers generally have a harder time attracting capital from limited partners until they are able to establish a track record. The challenge was exacerbated by the pandemic, which pushed many LPs to stick only with their established managers and back off from forming new relationships.
Patient Square, however, presents an interesting opportunity for LPs in that Momtazee is assembling a strong bench of healthcare-investing talent. Momtazee announced the formation of the firm in August 2020 after 21 years at KKR. He helped form the mega-firm’s healthcare sector group and led it for 10 years.
Recent hires at Patient Square include Neel Varshney, another former KKR healthcare executive, and Alex Albert, who most recently co-led private equity healthcare at Ares Management.
Earlier this year, the firm hired Adam Fliss as a founding partner and general counsel. Fliss previously worked as general counsel at TPG Capital.
The firm pursues investments across healthcare products, services and technologies in sub-sectors like biopharmaceuticals, pharmaceutical value chain, medical devices, healthcare providers and tech-enabled services, according to its website.
Momtazee also launched a special purpose acquisition company, sponsoring Montes Archimedes Acquisition Corp, which raised $400 million in an IPO last year.
Despite the challenges, first-timers are trying their hand at raising money. Those having success are generally led by well-known executives from larger shops, like Momtazee and Patient Square. Or, new firms that have invested deal-by-deal for a period of time, building a track record, have also had success.
Seaside Equity Partners successfully raised its debut fund, closing on $160 million around early February. Seaside began investing deal-by-deal, building a portfolio of four platform companies. Another popular first-timer is BayPine, formed by executives from Silver Lake and Blackstone.
Patient Square declined to comment.