WCAS, Linden, Cressey drive healthcare fundraising momentum in 2018

  • Average healthcare-focused fund size raised in ’18: $261 mln
  • $36 bln of industry’s $56 bln total dry powder is North America-centric
  • Linden raises largest healthcare-exclusive fund, collecting $1.5 bln for Fund IV

Led by three buyout firms, the healthcare private equity industry is on the brink of another record year of fundraising, according to Preqin.

The healthcare private equity industry holds $199 billion in assets under management, including a record $56 billion in dry powder, the data provider said in a December report.

Welsh, Carson, Anderson & Stowe raised the largest healthcare-focused buyout fund, with its 13th fund collecting $3.5 billion in November. The healthcare and technology investor raised $3.3 billion for Fund XII a couple years earlier.

A Chicago shop, Linden Capital, raised the largest healthcare-exclusive pool of capital in May, with Fund IV closing at $1.5 billion. Cressey & Co, also of Chicago, followed, with its sixth fund bringing in $995 million in June.

Broadly speaking, the majority of healthcare-focused private equity dry powder is focused on North America, with fund managers earmarking $36 billion for the region, Preqin said.

The year produced 84 healthcare-focused private equity funds that held a final close, raising a combined $22 billion. That equates to an average fund size of $261 million, which according to Preqin is the largest average fund size for the healthcare industry in over a decade.

Here’s Preqin’s “top 10” lists of healthcare-focused buyout funds that have closed since 2016:

  1. WCAS Fund XIII: closed at $3.5 billion in November 2018
  2. WCAS Fund XII: closed at $3.33 billion in June 2016
  3. Linden Capital Partners IV: closed at $1.5 billion in May 2018
  4. Cressey & Co Fund VI: closed at $995 million in June 2018
  5. Webster Capital IV: closed at $875 million in August 2018
  6. Water Street Healthcare Partners IV: closed at $863 million in April 2018
  7. Frazier Healthcare Growth Buyout Fund IX: closed at $780 million in April 2018
  8. GHO Capital Fund I: closed at 696 million euros in November 2016
  9. Five Arrows Capital Partners: closed at $655 million in September 2018
  10. Frazier Healthcare Growth Buyout Fund VI: closed at $525 million in March 2016

Honorable Mentions:

  • ArchiMed’s Med II: closed at 376 million euros in September 2017
  • G Square Capital II: closed at 376 million euros in September 2017
  • WindRose Health Investors IV: closed at $365 million in October 2016

Correction: A previous version of this report incorrectly listed Welsh, Carson, Anderson & Stowe as based in Chicago. WCAS has offices in New York and San Francisco. The report has been updated.