A firm co-founded by Apax Partners’ former co-head of US healthcare has closed its first fund on $200 million.
The firm, 1315 Capital, was founded in 2014 by Apax veteran Adele Oliva and healthcare investor Michael Koby. It will focus on investments in speciality pharmaceutical, medical technology and healthcare services companies.
LPs in the fund include the Los Angeles City Employees’ Retirement System, which committed $10 million, and the Los Angeles Fire & Police Pension System, which committed $5 million, according to PEI Research & Analytics.
“Michael and I founded the firm with the strong view that there is a substantial opportunity in the smaller side of healthcare growth equity – typically companies with $5 to $25 million of revenue where deep industry and investing experience in this stage of healthcare is valuable. We also felt there was a more productive way to leverage operating partners and have a unique model,” Oliva told Private Equity International sister title Private Healthcare Investor.
The fund is targeted at US companies, but Oliva says she is “in touch with a number of my former Apax healthcare colleagues in Europe, India and Australia. I would love to find ways to collaborate with them.”
Oliva says the firm decided to focus on three specific sub-sectors – speciality pharma, medtech and healthcare services – because “massive consolidation in healthcare over the last 10 years has resulted in hundreds and hundreds of smaller products [which are] now part of larger strategics not getting significant commercial attention. Some of these products could provide significant benefits to a niche market of providers and patients. In addition, within healthcare services, we find device and diagnostic-enabled service platforms and, more broadly, companies focused on cost containment, attractive areas for investment.”
The firm has a portfolio of four companies including JDS Therapeutics, a speciality pharmaceutical company for which 1315 led a $16 million Series B financing round last October. Oliva says she anticipates a total of between 10 and 14 investments for the fund. Other companies include Encore Dermatology, which delivers prescription therapies and medical devices, and Onkos Surgical, a medical device company in the orthopaedic oncology market.