Ascension Health Ventures recently closed its second fund with $200 million in capital commitments. The St. Louis-based firm launched in 2001 as a wholly-owned subsidiary of Ascension Health, and expanded its LP base this time around to also include Catholic Health Initiatives and Catholic Health East. So we’ve got Four Questions for Matt Hermann, a managing director with AHV.
1. Your first fund was solely funded by Ascension Health. Why expand the investor base for Fund II?
Hermann: The primary rationale was the spirit of Catholic collaboration. Ascension Health realized that it had made a substantial investment to build out the infrastructure to make these sorts of investments, and thought that it could, and should, collaborate with other Catholic health organizations.
2. Does your LPs’ religious affiliation restrict and/or direct your investment focus?
Hermann: I think it does. What we say is that we look for opportunities in areas of interest for the limited partners. But we also are bound by some religious limitations…
3. Such as?
Hermann: For example, we wouldn’t invest in things related to abortion.
4. Our records show that Ascension’s first fund had 20 portfolio companies, and has five exits to date (three IPOs, two sales). How has a 2001 vintage fund not yet had a company go under?
Hermann: There actually is one that went out of business – SERVicys – but the rest of the companies are around and making money. I don’t know how to explain it, except that we have a slightly different story that makes us appealing for good companies. We have access to 200 hospitals, which is a big selling point for a young healthcare company.