Ferrer Freeman, 2nd CFO Out, Winding Down?

Ferrer Freeman & Co. LLC has lost its CFO and the buyout firm is apparently winding down, multiple sources confirmed to peHub, a sister Web site of Buyouts.

Tom Flynn, Ferrer Freeman’s CFO and an investment partner, joined SV Life Sciences as of Jan. 1, a spokeswoman for the venture capital firm confirmed. Flynn is a venture partner at SV Life Sciences. He began working informally for SV Life Sciences in the fourth quarter, the spokeswoman said.

A person at Ferrer Freeman confirmed that Flynn left the buyout shop. His departure follows Tricia Summers, who left Ferrer Freeman in 2010. Summers was CFO at the time, sources say.

Calls to Ferrer Freeman were not returned by deadline.

Greenwich, Conn.-based Ferrer Freeman, a health care buyout firm, manages more than $900 million. The shop was founded in 1995 by Carlos Ferrer, a former Credit Suisse health care banker, and David Freeman, an ex-J.P. Morgan health care banker.

Rumors of Ferrer Freeman’s problems have circulated for some time. Sources said last summer that Ferrer Freeman had indefinitely postponed efforts to raise its fourth fund, after more than a year of trying, and could wind down if it failed to raise money. Now, fundraising plans are said to be off, and the firm is “winding down” and selling off its portfolio, four sources sid.

“It takes a long time to kill a PE firm,” one buyout executive said. “They had return issues for a long time.”

“It’s over,” a banker said.

Ferrer Freeman has raised three funds. Fund I raised $200 million in 1997, while its second pool, FFC Partners II LP, totaled $291 million in 1999. Ferrer Freeman’s third fund came in at $400 million in 2004. The first two funds are invested and the firm was investing from its third fund.

Ferrer’s second fund has a net IRR of 7.6 percent as of March 31, 2010, according to the California Public Employees’ Retirement System. CalPERS was also an LP in Ferrer’s third vehicle but appears to have since sold the position (the last data we have is a -4.6 percent IRR at year-end 2007). Investment data was unavailable for the first fund.

However, Ferrer has scored some exits recently. Last week, Irving Place Capital inked a deal to buy National Surgical, which owns and operates a network of 14 surgical hospitals, from Ferrer Freeman, Charlesbank Capital Partners and JP Morgan Asset Management. Financial terms were not announced. Ferrer Freeman was also an investor in Concentra, a portfolio company of Welsh Caron, which was sold to Humana in December.

Luisa Beltran is a senior writer at peHub, a sister Web site of Buyouts.