Yankee launches $50M med tech fund

Yankee Equity Solution has launched a $50 million fund focused on profitable medical companies based in Massachusetts.

The fund, YES Medical Technology Fund, is targeting medical technology companies with earnings of at least $2 million on revenue of at least $10 million. It is considering opportunities in women’s health, oncology, urology, pain management and orthopedics. Managing Director John Williams says that the firm is currently in discussions with a company working on a novel biological testing methodology.

“Our aim is to build on a company’s existing strengths and help management fuel growth by fine-tuning operating processes and executing a driven expansion plan,” Williams says.

Cotuit, Mass.-based Yankee Equity Solution operates an allocation of an undisclosed private equity firm with $1 billion under management. “It’s a family-centric fund and their feeling is that when we close our first transaction they’ll announce their participation to the world,” Williams says.

Yankee Equity Solution has a flexible mandate. It can go above its $50 million allocation and does not have a specific investment time frame. The fund may even invest in venture-backed startups that have hit the wall.

The new fund comes as venture deal making in the medical technologies space slows. VCs investment in health care services and medical devices fell to $3 billion during the first nine months of 2008, down from nearly $3.3 billion during the same period last year, according to data from Thomson Reuters (publisher of PE Week) and the National Venture Capital Association.

Williams previously has worked with four small private health care companies. He took one of the companies public and sold the other three. He was the CEO of Physiometrix, a brain-monitoring device company, which raised $35 million in funding from Mohr Davidow Ventures, Oxford Bioscience Partners and other investors before launching a $22 million IPO in 1996. —Alexander Haislip