Firms & Funds

Veritas gears up to launch Fund VII with $5 bln target

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Healthcare, private equity, Veritas Capital
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  • Veritas just launching Fund VII fundraising
  • Closed prior fund on about $3.5 bln
  • Has made some large bets on healthcare

Veritas Capital, a tech-focused shop that recently made some big healthcare bets, is launching fundraising on its seventh fund, sources told Buyouts.

If Fund VII, hits its $5 billion target, it will be the firm’s largest, the sources said.

Fund VII is just launching into market now and a dataroom is expected to go live soon, one of the sources said.

The pool is expected to hold a first close in Q3, this person said. UBS is placement agent.

Veritas is led by Managing Partners Ramzi Musallam, CEO, and Hugh Evans.

The firm closed its sixth fund on $3.5 billion in 2017 in a four-month marketing. It raised about $1.8 billion for Fund V in 2014 and $1.2 billion for its fourth fund in 2010.

Alternative-assets-data provider Preqin listed Veritas as its most consistent performing buyout fund manager as of June 30, 2018, with five funds in the top quartile.

Fund VI, still early in its J-curve period, was generating a -30.43 percent IRR and a 0.84x multiple as of June 30, 2018, Montana Board of Investments data shows.

Fund V had a 15.67 percent internal rate of return and 1.39x multiple as of that date, Montana’s information says. Fund IV was producing a 17.67 percent IRR and 1.92x multiple as of that date, according to Montana numbers.

Veritas has made several big healthcare bets in the past year. In February, the firm, along with Elliott Management’s Evergreen Coast Capital, completed a take-private of Athenahealth, which provides medical-record, revenue-cycle, patient-engagement, care-coordination and population-health services. The deal was valued at about $5.7 billion.

The firm last year acquired GE Healthcare’s enterprise financial management, ambulatory care management and workforce management assets for $1.05 billion.

Last year, Veritas sold BeyondTrust, a cybersecurity business, to Bomgar for an undisclosed amount.

The fundraising would be a major milestone for Veritas, which several years ago had an uncertain future after its founder, Robert McKeon, committed suicide.

McKeon’s death in 2012 tripped a key-man provision in Fund IV that would have enabled LPs to immediately end the fund’s ability to invest.

Three partners, Musallam, Evans and Buddy Polk, negotiated to keep Fund IV going, Buyouts reported at the time.

Action Item: Check out Veritas’s Form ADV here: https://bit.ly/2Ybfjcs