Patient Square talks to LPs about second fund amid fundraising slowdown

In the muted fundraising environment, one emerging manager is quickly ramping its fundraising ambitions with its second fund.

Patient Square Capital, the healthcare-focused shop formed by ex-KKR dealmaker Jim Momtazee, has been talking to limited partners about its second fund, three sources told Buyouts.

The firm is among a group of newer managers testing the tough fundraising environment to try and attract capital from LPs. Fundraising is slow and especially so for emerging managers, who have seen their share of the private equity capital share fall precipitously over the past two years.

Emerging manager fundraising is down, with first-time funds globally raising around $25 billion last year, compared to $47.6 billion in 2022, according to Buyouts data.

Patient Square was formed by principal owner Momtazee in 2020. It closed its debut fund last year on $3.9 billion, beating its $3 billion target. At that size, the pool was among the largest-ever first-time private equity funds. PJT Park Hill worked as placement agent on the fundraising.

The firm wants to raise more for Fund II, though the exact target is not clear. Patient Square could target between $5 billion and $6 billion for the pool, sources said. A spokesperson for the firm declined to comment.

Patient Square targets investments in growing healthcare businesses in subsectors like biopharmaceuticals, pharmaceutical value chain, medical devices and diagnostics, providers and tech-enabled services, according to the firm’s Form ADV.

Last year, the firm joined Elliott Investment Management and Veritas Capital in the take-private of Syneos Health, a biopharmaceutical services company.

Momtazee assembled a strong team of healthcare specialists, including Alex Albert, who was formerly co-head of private equity healthcare investments at Ares Management; Neel Varshney, who joined from KKR, where he was a managing director on KKR’s Americas healthcare team; and Karr Narula, who formerly worked at KKR as head of the portfolio operations team in the Americas.

The firm last year hired David Katz as a partner. Katz formerly worked as an adviser and member of the investment committee at The Pritzker Organization, before which he worked at GTCR, where he co-led the healthcare team.

Patient Square is among a group of emerging managers in the market this year. Others include Hoplon Investment Partners, targeting between 200 million euros and 300 million euros for its second fund, Buyouts recently reported.

Others include Allied Industrial Partners, Point 41 Capital and Emerald Bridge. Read Buyouts’ extensive database of emerging managers, including first-time funds, here.

Also, Buyouts will feature numerous speakers in the emerging manager community at the upcoming Nexus 2024 private equity conference March 6-8 in Orlando. Read more here.