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Altaris sets $800 mln target, $1 bln hard cap for Fund IV

  • Altaris previous fund raised $513 mln
  • Fund III netting 46 pct IRR through Dec. 31
  • Connecticut mulls re-up to Fund IV

Altaris Capital Partners is back on the market with a new healthcare-focused fund targeting $800 million with a $1 billion hard cap, investment memos obtained via open-records requests from the Connecticut Office of the State Treasurer show.

Treasurer Denise Nappier, trustee for the state’s $31.5 billion retirement system and trust funds, is weighing a commitment of as much as $50 million to Altaris Health Partners IV, a statement released last week says.

At its hard cap, Altaris IV would be almost double the size of the $513 million fund the firm raised in 2013.

Altaris specializes in acquiring majority and minority stakes in healthcare-oriented companies, often by carving out units from larger corporations. The firm will use Fund IV to buy companies valued up to $250 million, typically in medical devices, pharmaceuticals, healthcare IT and healthcare services.

The firm is led by four managing directors, David Ellison, Dr. Robert Watson and Co-Founders George Aitken-Davies a Daniel Tully. A third co-founder, Michael Kluger, transitioned to a senior advisory role with the firm after retiring last year.

Fund IV limited partners will pay a 2 percent management fee on committed capital through the fund’s investment period, or until Altaris raises a successor fund. After the fund’s six-year investment period concludes, LPs will pay a 2 percent management fee on invested capital.

Connecticut is an LP in three previous Altaris funds, according to state pension documents. Through Dec. 31, Fund I was netting a 13 percent internal rate of return and 1.7x multiple. Fund II was netting a 28 percent IRR with a 2.4x multiple and Fund III was netting a 46 percent IRR with a 1.7x multiple.

Altaris did not respond to a request for comment.

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Healthcare workers prepare medicine at the Cancer Center and Institute of Oncology in Warsaw.  Photo courtesy Reuters/Katarina Stoltz