Texas MRS, Wisconsin, Alameda County place bets on European healthcare fund

  • Why is this important: Alameda Co., Texas pensions commit to CapVest for first time
  • Fund: CapVest Equity Partners IV
  • Target: $1 bln
  • Amount Raised: N/A
  • Placement Agent: Credit Suisse

CapVest, the London private equity firm, has attracted three U.S. pensions to commit to its EU healthcare-focused fund, CapVest Equity Partners IV. Fund IV is targeting $1 billion.

Texas Municipal Retirement System, State of Wisconsin Investment Board and Alameda County Employees’ Retirement Association have made commitments totaling more than $137 million.

The Texas and Wisconsin systems approved commitments in the ballpark of $50 million each in late June, while Alameda County’s board moved to commit $34 million.

This is the first time Alameda County and Texas pensions have committed to a CapVest fund. It is the second such occasion for Wisconsin, which had committed $42 million to CapVest Equity Partners III in 2014.

Across its previous three funds, CapVest reported that 30 percent of its transactions had been in healthcare. These have included Curium, a global producer of nuclear tracers for diagnostic imaging tools, and Mater Private Healthcare, Ireland’s leading specialist private hospital group.

CapVest sold Mater Private to HarbourVest Partners in October 2017 for $500 million.

Recently, CapVest also said it acquired NextPharma, a pharmaceutical contract development and manufacturing organization that employs more than 1,000.

The company is a main player in Europe’s market for product formulations, clinical trials and logistics services.

While CapVest declined to go into detail about its new fund, John Keilthy, a spokesman for the firm, confirmed that “healthcare is an obvious focus, as is food manufacturing and distribution.”

Keilthy also said these are areas where CapVest has “and [will] continue to make investments.”

CapVest Equity Partners IV will work to acquire six to eight platform investments — control and buyout opportunities with middle-market companies — and then, build them out through follow-on acquisitions.

If CapVest’s fundraising target is met, CapVest Equity Partners IV will be more than twice the size of its 2014 predecessor, which raised $467 million.

According to Wisconsin’s Q4 2017 report, Fund III was generating a 2.06x multiple and a 38.7 percent internal rate of return.

CapVest is working with Credit Suisse as placement agent. Credit Suisse declined to comment.

Action Item: Check out CapVest’s Form ADV here: https://bit.ly/2LZK6m2