This is Chris, on the Wire this morning.
Thanks everyone for getting in your Deal of the Year nominations … we’re seeing some great exits as we go through our voluminous lists. As always, it’s going to be tough to figure out which deals stand out among all the others. Be assured, your intrepid Buyouts and PE Hub editors will be sequestered in a smoky backroom all week working tirelessly to make our selections.
Now, on to the show …
Opportunities: Healthcare is currently the third-most-popular sector for private equity and venture capital – behind tech, media and telecom (TMT); and financial services. PE and VC investments in the sector totaled $10.83 billion, according to S&P Global Market Intelligence. Today, PE Hub is launching a new series focused on private equity firms investing in healthcare and featuring conversations with investors in the sector. We’re kicking off the series with insights from Jeff Crisan, co-founder and managing partner of Silversmith Capital Partners.
“Healthcare is a massive market and fundamentally inefficient on many fronts, which leads to a lot of opportunities,” Crisan explained. “It’s a massive sector in the trillions of dollars. If you can fix a problem area in the sector, it might save you 10 basis points, but if you multiply 10 BPs by a trillion dollars, then you have made a huge impact and built a big and important business.”
Crisan identified three areas of opportunity for private equity in healthcare: the shift to value-based care; the impact of value-based care on revenues and billing cycles; and the need to access and share patient data. Read the full piece here on PE Hub.
Adjusting: Team stability is one of the major risks when LPs back a first-time manager. Generally investors look for teams that have worked together at prior firms, and perhaps are simply spinning out of their former shops.
Crosspoint Capital, which had a whirlwind first-time fundraise, closing on $1.3 billion last year for investments in cybersecurity, data privacy and infrastructure software, faced a couple significant departures recently. As the firm embarks on fundraising for its second pool, the departures will likely raise questions with prospective investors.
One of Crosspoint’s senior leaders, Ian Loring, who joined the firm from Bain Capital in 2020, left the firm around the beginning of the year, sources told Buyouts. Perhaps even more curious, considering the firm is gearing up to raise its next fund, is the departure of Crosspoint’s head fundraiser and chief of staff, Emily Melchior, who joined last summer and left recently, sources said.
The two are no longer listed on Crosspoint’s website. It’s not clear why they left or if they are heading to new firms. A spokesperson with Crosspoint declined to comment. Read more here on Buyouts.
Fewer LPs are set this year to back first-time funds. Private Equity International’s LP Perspectives 2022 Study found 42 percent of respondents saying they are “just as likely” or “more likely” to commit to these funds, down from 51 percent in 2021.
Last year, some 553 first-time funds collected more than $46 billion globally, Preqin reports. That was down from the $52.8 billion raised by 572 funds globally in 2020. The peak was in 2017, when 924 funds globally raised $196.7 billion, according to Preqin’s information.
40 under 40. Time is running out to submit entries for Private Equity International’s fourth annual rising stars of private equity list. PEI’s 40 under 40: Future Leaders of Private Equity will be published online and in the Future of Private Equity Special in early May. Submit your nomination by end of day tomorrow, Thursday February 17 here. The list will feature individuals across five categories: Investor (LP); Fundraiser; Dealmaker; Lawyer; Operator.
That’s it for me! Hit me up with tips n’ gossip, feedback or book recommendations at email@example.com or find me on LinkedIn.