Avista Capital seeks $750 mln to $1 bln for Fund IV: sources

  • More than 50 pct of Avista Capital Fund IV will focus on healthcare: sources
  • Avista Capital Partners IV LP seeking $750 mln to $1 bln: sources
  • UBS is the placement agent for Avista Fund IV: SEC filing

Avista Capital Partners’ latest fund, which will focus mainly on healthcare, could target as much as $1 billion, two sources familiar with transaction said.

Avista’s fourth fund will also include industrial and consumer but more than half will target the healthcare space, the people said. “Energy is no longer in the same fund,” one of the sources said.

Avista filed a Form D for Fund IV in January, listing UBS as the placement agent. Since then, the private equity firm has provided no further information on the pool. Two sources said Avista Fund IV is seeking $1 billion, while a third person said the fund has lowered its goal to $750 million.

Former employees of DLJ Merchant Banking formed Avista in 2005. The New York PE firm has about $6 billion under management. Avista makes controlling or minority investments, $50 million to $300 million, in middle-market companies, the firm’s website said.

Fortune reported in December that Avista’s Fund IV wouldn’t include energy because those deals dragged down overall returns of the third fund. Avista’s third fund closed on $1.4 billion in July 2013. Fund III was generating a 7.8 percent IRR and a total value multiple of 1.23x as of June 30, data from Oregon Public Employees Retirement Fund showed.

This compares with Avista’s second pool, which collected $1.8 billion in 2010. Fund II is producing a much higher IRR of 19.4 percent and a 2.09x total value multiple, the pension system said.

By separating energy, Avista Capital will focus more on healthcare, consumer and industrial, one of the sources said. “It makes sense. Their healthcare portfolio has done very well,” the source said.

Avista earlier this month became the latest PE firm to launch a blank-check company, raising $300 million. Avista Healthcare Public Acquisition Corp priced 30 million shares at $10 each. Avista Capital executives own 20 percent of the SPAC.

In July, Avista, along with Partners Group, sold Strategic Partners, a provider of medical scrubs and other uniforms, to New Mountain Capital. The deal was reportedly valued at $900 million.

Another deal, Convatec, was expected to go public on the London Stock Exchange this month, Bloomberg reported. Avista and Nordic Capital acquired Convatec in 2008; the company paid out a roughly $779 million cash dividend to shareholders in 2013.

Executives for Avista and UBS could not be reached for comment.

Action Item: To contact Avista email info@avistacap.com

Medical personnel perform maxillofacial surgery on a patient at Medical Center Hospital in San Juan, Puerto Rico, on September 15, 2016. Photo courtesy Reuters/Alvin Baez