In today’s private equity renaissance, new funds seemingly crop up out of nowhere. But for those active in the healthcare space, Miguel Fernandez is a name that most people are familiar with, and through his new firm MBF Healthcare Partners, Fernandez intends to further boost his presence in buyout circles.
The firm’s new fund, MBF Healthcare Partners LP, closed with $200 million of capital. The firm could have taken in more money, but ultimately chose to turn away close to $70 million.
Fernandez most recently struck gold in the managed care space, with investments in Physicians Healthcare and CarePlus Health Plans serving as cornerstone investments. However, through the new fund, Fernandez intends to branch out to take on other areas in healthcare and will likely avoid managed care for the foreseeable future.
“We’ve basically looked at everything but managed care in the last six months,” Fernandez told Buyouts. “We thought it was a good time to sell out [our managed care interests], so we did. Right now we’re primarily looking at healthcare services companies in all fields… all the way from dental to home healthcare to hospital services.”
In assembling the MBF team, Fernandez tried to balance an operations focus with financial know-how. He recruited Marcio Cabrera and Jorge Rico, both vets from Ramsey Health Care, to work in the firm’s Coral Gables headquarters. In the firm’s New York office, Fernandez installed Oliver Moses, who had spent the past 11 years in Merrill Lynch & Co.’s healthcare investment group. Further bolstering the team, MBF has established an advisory committee that includes the likes of Pediatrix Medical Group CEO Dr. Roger Medel, and the firm is also looking to add some more analyst positions to its Florida office.
While MBF has not yet notched a deal, Fernandez notes that over the past 20 years, he’s spearheaded a string of investments that would look good on any PPM. “We’ve made 12 transactions, strictly on a startup or buyout basis, but we’ve never used the structure of fund before,” he said. Fernandez further detailed that in those 12 investments, he and other shareholders have realized a whopping 26x return on equity, with roughly $50 million worth of capital investment yielding $1.3 billion in returns.
The new fund will be targeting businesses with enterprise values of between $25 million and $100 million with EBITDA ranging from $5 million to $20 million. Fernandez states that MBF will seek out co-investments if it sees opportunities that come in above those ranges.
The new team has been together since February, and has already made close to 20 offers, with two that have been accepted and currently heading toward completion. Fernandez would not give any details regarding the new investments.