Patient Square eyes more than $1bn first close on debut healthcare pool

The fund is one of several first-timers in the market pushing for LP capital at a time when investors are keen to boost exposure to the asset class, including forming new relationships.

Patient Square Capital is eyeing a first close on more than $1 billion for its debut fund, which has lofty ambitions for investments across healthcare, according to a person with knowledge of the firm.

The fund is one of several first-timers in the market pushing for LP capital at a time when investors are keen to boost exposure to the asset class, including forming new relationships. First-time fundraising still remains challenging for all but those firms launched by well-known executives.

Formed by ex-KKR healthcare chief Jim Momtazee, Patient Square is targeting up to $3 billion for its first fund. If it hits that mark, that would make it among the largest-ever first-time funds.

The pool will likely be raising through the second half of this year, sources told Buyouts. The first close is expected soon.

Park Hill Group is working as placement agent on the fundraising. The fund hit the market in February. A spokesperson with Patient Square declined to comment.

Patient Square 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.

In June, Patient Square made its debut investment, leading a $145 million financing in Apollo Therapeutics, which has a pipeline of more than 15 therapeutic programs in development across oncology, inflammatory disorders and rare diseases.

The company was launched in late 2015 as a joint venture between the University of Cambridge, Imperial College London (then subsequently IP Group Plc), University College London, AstraZeneca, GlaxoSmithKline and Johnson & Johnson Innovation. Despite its UK roots, Apollo is set to expand with US operations out of the Boston area and will have a “transnational presence,” Momtazee told PE Hub at the time.

Proceeds of the financing are for “pushing the pipeline forward, geographic expansion and company buildout,” Momtazee said. Apollo expects to roughly triple its headcount in the next year-and-a-half.

Patient Square, in this case, “would love to put in hundreds of millions of dollars over time,” Momtazee said. “If you look at every one of these deals I’ve done, we’ve always put money in more than once. The better things go, the more money you need.”

Simply put, the further down the drug development process you get, the more capital a program requires.

Update: This story was updated to reflect that a first close has not yet happened, but is expected soon.