Iron Path Capital is targeting its first fund that will invest in healthcare and industrials.
The firm, formed by ex-executives from Quad-C, is among a handful of first-timers seeking capital from limited partners who are generally slowing their fundraising pacing, especially when it comes to new relationships.
“It’s never a perfect time to be an emerging manager,” one source said in a recent interview. “LPs are continuing to kind of try and minimize their number of relationships. They’re now over exposed to private equity. They continue to back some of their winners, so it’s hard for a new manager to come in and beat out an incumbent.”
Iron Path is targeting about $250 million for its debut fund that will invest in healthcare and industrials companies in the lower-mid-market. The firm was formed last year by Rob Reistetter and Scott Mraz. M2O Private Fund Advisors is working as placement agent on the fundraising.
In June, the firm announced its first platform investment from Fund I in Capitol Pain Institute, an interventional pain management provider. The physician-led consolidation platform focuses on delivering care for patients with chronic pain.
Iron Path also made two other platform pre-fund investments: Emergence Health Holdings and Versant Diagnostics.
Prior to Iron Path, Reistetter worked at Quad-C, where he spent nearly 14 years. He was one of two professionals at the firm who helped establish the healthcare focus and also led specialty chemicals investing for seven years, according to his biography.
Mraz most recently worked as president of NuSil Technology, which makes specialty materials for healthcare and aerospace applications. Before, he worked as an investment professional at Quad-C and Apax Partners, his biography said.
The firm in July hired Ted Clark as a partner. Clark formed Royal Adhesives & Sealants in partnership with Quad-C in 2003 and grew the business through 19 acquisitions.
Last year, first-time funds set a record, collecting about $14.1 billion across 60 funds, according to Pitchbook’s 2021 Annual US PE Breakdown.
The number of funds that closed fell from the prior year, when 81 funds raised $9.6 billion, Pitchbook said. “The impressive capital raised total is primarily due to outsized fund closes by a few high-profile entrants,” according to Pitchbook.