Excellere Partners, under new leadership since the death last year of co-founder David Kessenich, secured most of the target set for its fourth buyout offering.
Excellere Capital Fund IV brought in more than $693 million, according to a Form D fundraising document filed this month. That puts the vehicle within reach of a $750 million target, disclosed in a May report by New Jersey Division of Investment. UBS is the placement agent.
Fund IV received a significant leg up from two returning limited partners, with Los Angeles County Employees’ Retirement Association and New Jersey’s state pension system both committing $100 million. The general partner is putting up at least $25 million, the New Jersey report said.
Excellere in January 2020 lost co-founder and managing partner Kessenich, who died after a multi-year battle with cancer. His death interrupted deployment of the 2017-vintage Fund III until a continuation plan was approved by LPs, Buyouts reported.
The Denver private equity firm in March 2020 unveiled a new leadership team consisting of managing partners Brad Cornell, Ryan Glaws, Matthew Hicks and Patrick O’Keefe, all former partners. Investing of Fund III was resumed the same month.
Cornell, Glaws, Hicks and O’Keefe are also leading Fund IV.
Excellere was launched in 2006 by Kessenich and Robert Martin, who in 2017 also died of cancer. The pair, veterans of KRG Capital Partners, designed a control strategy of investing in founder-led, lower-mid market companies in North America operating in sectors like business services, healthcare and industrials.
Pivot to healthcare
Fund IV will maintain this strategy but with preference given to opportunities in the healthcare industry, the New Jersey report said. Deals in healthcare products and diagnostic tools, outsourced healthcare business services, pharmaceuticals and pharmacy services and provider services, are expected to account for about two-thirds of fund capital allocations.
The fund is expected to make 10 to 12 platform investments in companies with revenue of $25 million to $150 million. Initial equity will be in the range of $50 million to $100 million.
The strategy’s stronger emphasis on healthcare is apparent in Excellere’s most recent deals. In January, the firm said it partnered with Vistria Group in the acquisition of SCA Pharmaceuticals, a sterile admixtures and pre-filled syringes provider. The seller was Enhanced Healthcare Partners.
Excellere was also fielding interest in January in portfolio company LucidHealth, PE Hub reported. The radiology services provider was originally backed in 2016. A couple of months earlier, Excellere sold drug commercialization consultancy Two Labs Pharma Services to GHO Capital-owned Envision Pharma Group.
Excellere Capital Fund III, closed at $625 million, was generating a net internal rate of return of 19.1 percent as of December 2020, the New Jersey report said. Fund II was earning a 32.3 percent net IRR, while Fund I was earning a 32.7 percent net IRR.
Excellere declined to provide a comment on this story.