Good morning, Hubsters. MK Flynn here with today’s Wire.
Keeping patients safe. As the senior population grows, many of us have loved ones who are in the hospital or in other care settings. Today in PE Hub’s ongoing series featuring PE firms investing in the healthcare sector, Aaron takes a close look at Berenson Capital’s recent investment in MedSitter, a remote patient monitoring (RPM) system.
“Hospitals are not leveraging technology, and it’s a big problem,” Brendyn Grimaldi, managing director, Berenson Capital, said. “One example is patient safety within the hospital setting. If you ask a group of chief nursing officers what their biggest challenges are, more often than not, on the list of the top three challenges, are patient falls. The cost of patient falls is profound. Once a patient falls, it changes their care plan and negatively impacts quality of life. It changes everything.”
It is also bad news for the facility. Once someone falls, any care associated with the fall (x-rays, surgeries, extended stay) is not reimbursable, so it is very economically punitive for the facilities.
Grimaldi noted that most of the market is still addressing falls with “old school” tactics, such as non-skid socks. A common practice is to station an aid in a patient’s room for round-the-clock monitoring. But, studies have shown that the practice does not have a significant impact on reducing falls. Plus, it’s a labor-intensive, expensive approach.
Enter MedSitter, which observes patients most at risk for falls. It’s a cloud-based software application that allows one person to sit at a central location and monitor eight to 10 patients simultaneously. This capability allows hospitals to reduce the cost of monitoring patients at risk for falling, and it has been shown to reduce the number of falls that happen within the hospital setting – creating cost savings across the board, according to Grimaldi.
Berenson views MedSitter as a platform investment and is looking to expand capabilities and seeking potential add-on acquisitions in the future.
Women’s History Month. In the Wire throughout March, we’re highlighting the dealmakers PE Hub and Buyouts named Women in private equity: The class of 2022.
Today, let’s look at Lauren Rich, director, Wafra, profiled by Chris.
“Rich focuses on investing in GP management companies, a strategy known as GP stakes investing. The team also provides seed capital to new managers and spinouts through its partnership in Capital Constellation, which is funded by a group of institutional investors and managed by Wafra. Capital Constellation made a strategic investment in Broad Sky Partners in January, a firm formed by ex-Carlyle Group executive Tyler Zachem. Rich worked as a senior deal team member on transactions involving Motive Partners and Oak Hill Advisors, which sold stakes in their firms to Apollo and T Rowe Price, respectively. She was also a senior member in a Capital Constellation investment into a real estate private equity firm, as well as the lead on several financing related activities last year. Rich sits on the boards of three Wafra portfolio companies.”
Rich told Chris she expects investments in management companies to continue to be a popular strategy. “It will continue to evolve.”
Seeding new firms is a rewarding experience and working with new managers is a chance to stress the importance of diversity and inclusion, Rich said. She serves on the board of Wafra’s DEI committee. “We have an ESG lens for how we assess every manager we’re talking to,” she said.
For more, read the whole report, in which we profile 10 stellar dealmakers.
Recommended reading. Next week, we’ll be welcoming new reporters to the PE Hub and Buyouts team. We can’t wait to introduce them to you. They are eager to roll up their sleeves and dive into the world of private equity, and they’ve asked for suggestions of books to read. Chris is recommending the classic Barbarians at the Gate: The Fall of RJR Nabisco, by Bryan Burrough and John Helyar (Harper Business, December 1, 2009). I’m recommending What It Takes: Lessons in the Pursuit of Excellence, by Stephen A. Schwarzman, the founder of Blackstone (Avid Reader Press, September 17, 2019). What’s your favorite book about private equity? Email me your picks to @firstname.lastname@example.org
And if you’re looking for something to read this weekend while yet another winter storm keeps you indoors, check out my Q&A series with high-profile PE pros, including:
Robert Reifman, managing director, Lincoln International. “Proactivity is critical” when buying in the competitive industrials sector, Reifman told me. “Buyers don’t have the time or resources to compete in a drawn-out auction process, instead finding themselves willing to pay a steeper multiple to ensure they will win the asset and take it off the table extremely quickly.”
Gretchen Perkins, partner, origination, Avance Investment Management. The former Huron Capital partner reflects on building a “different kind of PE firm” at Avance, now more than a year old. “The opportunity to be a part of something brand new in our industry really appealed to me,” said Perkins about joining emerging manager Avance. “I was excited to be able to help our young firm establish our unique culture, contribute to creating our go-to-market strategy, and to help recruit more diverse talent to our firm.”
Brent Gledhill, CEO, William Blair. “Valuation is a view of the future and growth is always the primary impact on valuations. Many sectors – consumer services, logistics, distribution, for example – are terrific sectors with higher valuations today that align with long-term trends. For instance, the growth rates and industry dynamics underpinning those sectors are yielding much greater efficiency and productivity, while demand is also growing.”
That’s all for today.
Stay safe this weekend,