GHO Capital Partners has amassed the largest ever healthcare-focused private equity fund for a Europe-headquartered firm in a sign LPs are backing GPs in one of the most sought-after secular growth industries.
The London-based healthcare specialist raised more than €2 billion in LP commitments for GHO Capital III, according to two sources with knowledge of the fundraise. The firm began raising capital for the vehicle six months ago with a €1.25 billion target.
The launch was a little over one year after GHO raised €975 million for its oversubscribed sophomore vehicle. It is unclear what the hard-cap is for Fund III and the firm is understood to have not yet held the final close on the fund.
Los Angeles County Employees’ Retirement Association committed €100 million to the vehicle, according to PEI data.
Similar to prior funds, Fund III will back mid-market companies in Europe within healthcare subsectors pharmabio, medtech, outsourced services and patient services. It is unclear how much of Fund III has been deployed thus far.
GHO’s latest investments include Velocity Clinical Research, a company which manages clinical trial sites across North America; X-Chem, a US-based drug discovery service provider; and Porto-headquartered biopharma company FairJourney Biologics.
Healthcare focused funds globally gathered $6.3 billion in 2020, compared with $11.7 billion the previous year, PEI data shows. Thus far this year, nine funds have collected $2.5 billion, including New York-based Avista Capital Partners, which raised $1.2 billion for its fifth fund and San Francisco-based Revelation Partners, which gathered $350 million for its third fund.
Healthcare private equity deal volume rose 21 percent to 380 deals in 2020, compared with 313 deals the prior year, while total deal value dropped 17 percent year-on-year to $66 billion, according to a report from Bain & Co. The average size of deals dropped 57 percent partly due to a lack of very large deals, with declines most seen in Europe and North America, the report noted.
Rede Partners is understood to be advising on GHO Capital III.
GHO and Rede both declined to comment on the fundraise.
– Adam Le contributed to the report.