BV Investment makes majority investment in Source Advisors; M2O secondaries chief Custar to join William Blair

Morning Hubsters!

What do you have going today, anything good? I did some conferencing this week in the city, it was so great to just be around people live and in-person. Very refreshing!

HC investing and covid: Spectrum Equity managing directors Steve LeSieur and Jeff Haywood spoke to PE Hub’s Aaron Weitzman about the firm’s approach to healthcare investing.

“Covid made healthcare harder for everyone but particularly consumers and patients. We saw things emerge and evolve like telehealth, teletherapy and virtual/remote diagnostics,” LeSieur said. “In our portfolio we have businesses like Headspace Health, which not only provides a mobile app focused on mindfulness and meditation, but through its merger with Ginger, provides a platform combining behavioral health content and tools with actual employer-led access to behavioral health resources through teletherapy.”

He added that even a company like GoodRx has a telehealth platform (GoodRx Care).

“PWN Health was the foundation of a meaningful portion of the covid testing that happened during the pandemic via their national ‘virtual’ clinician network. Coming into the pandemic, we had these high-level views about access. Ultimately, a lot of those things got accelerated and structurally changed by covid. Most of our companies were net beneficiaries.”

Read the interview here on PE Hub.

Tech: BV Investment Partners made a majority investment in Source Advisors, which provides software for specialty tax services for clients across a range of industries and geographies. The company is based in Fort Worth and has more than 150 employees.

“There is a broad and growing demand for specialty tax consulting solutions across end markets,” said Jason Kustka, managing director at BV, in a statement. Read it here on PE Hub.

People: Big move in the secondaries world this week. Mike Custar, who built and led the secondaries advisory group at M2O (which has won some chunky mandates in the highly competitive space), is leaving for a role at William Blair. Custar will be leading a GP-led advisory function at the mid-market investment bank. Read more here on Buyouts.

GP-led continuation fund capabilities have apparently become essential at investment banks, which need to be able to offer this type of option to sponsors as part of a path to exit for portfolio companies, sources told me. GP-led continuation funds, especially single-asset deals, have taken over the majority of market share in secondaries, which reached a record more than $130 billion in total volume last year.

There is some speculation in the market about whether mid-market investment banks will really compete for secondaries mandates or are simply playing “M&A defense”. In other words, making sure they don’t lose mandates by being able to offer continuation funds to sponsors as part of their full range of options. Single-asset deals sit in a gray area in that they are sort of like secondaries, but they are also sort of like coinvestments – and exactly how to approach such deals is still a work in progress at financial institutions.

That’s it for me! Hit me up with tips n’ gossip, feedback or Easter-related menu tips (I’m cooking for an early gathering this we/end), at cwitkowsky@buyoutsinsider.com or over on LinkedIn.