HealthpointCapital closes $420m fund(2)

The orthopedics- and dental-focused private equity firm has closed its second fund on $420 million – more than double the size of its debut vehicle.

New York-based HealthpointCapital Partners has closed its second fund on $420 million (€313 million), exceeding its $400 million target and well surpassing its 2004 debut fund, which closed on $160 million. The second fund’s hard cap was $500 million.

“We never wanted to go to the hard cap,” said HealthpointCapital managing director Elizabeth Varley Camp. The reason being that the latest fund is “over two-and-a-half times bigger than our first fund and we feel that Fund II is appropriately sized, given that we are a young firm and given the opportunities we see in the market”.

Founded in 2002 and focused exclusively on orthopedic and dental medical devices, HealthpointCapital is typically looking to invest $50 million to $90 million in companies with little to no debt and annual revenues ranging from $20 million to $30 million, she said.

“Orthopedics is a huge world, it’s one of the biggest and fastest-growing sectors in healthcare today,” Varley Camp said, noting that the related device market is a $30 billion industry. “We’re the only fund that focuses on that opportunity,” she said.

HealthpointCapital Partners II will target five to seven companies and has already invested nearly 40 percent of its capital. The firm held rolling closes while it was fundraising for approximately 15 months.

Roughly 70 percent of its limited partners are in the US, and include a mix of insurance companies, foundations, endowments, fund of funds and high net worth individuals.

“Several of our investors doubled their commitment toward the end [of fundraising] because they were very pleased with the investments we had made in Fund II,” Varley Camp said.

The firm recently purchased MicroDental Laboratories from Boston-based Riverside Partners for an undisclosed amount. It was an add-on acquisition for HealthpointCapital’s Vancouver-based portfolio company DTI Dental Technologies.

Since 2004, HealthpointCapital has invested $325 million in 12 deals, created five platform companies, and had two exits. With an average holding period of 1.5 years, the firm’s portfolio companies have together nearly tripled their revenue since HealtpointCapital’s initial investments, the firm said. It has $640 million in capital under management.