CalPERS has just unveiled a $700 million investment program in the U.S. healthcare space. Some of this might go to biotech startups, but the real focus seems to be on improving the efficacy of the overall healthcare market, which CalPERS’ CIO Russell Read called “fragmented and inefficient.”
Under terms of the deal, CalPERS will initially commit up to $500 million to a new initiative for direct investments and co-investments in healthcare companies. It also will earmark up to $200 million for healthcare-focused private equity funds and strategic joint ventures.
The initiative will be advised exclusively by Health Evolution Partners, a new private equity firm formed by Dr. David Brailer, former National Coordinator for Health Information Technology. Health Evolution Partners also plans to raise its own fund, in which CalPERS is expected to invest.
Here is a basic flowchart of the initiative: healthcare-chart.pdf.