Heritage Group closes second fund on $220m

Healthcare Innovation Fund II is larger than its target by $20m and its predecessor by $50m.

Healthcare-focused Heritage Group has closed its Healthcare Innovation Fund II on $220 million, surpassing its $200 million target.

According to a spokeswoman, the fund was in market for one year.

The fund’s investor base includes Adventist Health System, Cardinal Health, Cerner Corporation, Community Health Systems, Health Care Service Corporation, Horizon Healthcare Services, LifePoint Health, Tenet Health, Trinity Health, UnityPoint Health and five other systems the firm said.

These limited partners operate more than 550 hospitals, deliver products to more than 100,000 locations and generate about $300 billion in revenue.

Typically, the group invests between $10 million and $20 million at each transaction.

Heritage and its LPs have invested over $1 billion in more than 100 companies, according to Heritage’s website. Its current portfolio includes care management services organisation AllyAlign Health, bundled payment specialist Aver, healthcare data company Explorys, healthcare IT provider Ingenious Med and cloud-based platform Simplee.

Healthcare Innovation Fund I closed in 2012 on $175 million, just below its $200 million target, according to PEI Research & Analytics.

Heritage has led Series A fundraising rounds for companies including Smart Vision Labs, which raised $6.1 million in 2015, Inspire Energy, which raised $5 million in 2015, and Shareable Ink, which raised $4.5 million in 2010.

Based in Tennessee, Heritage was founded in 1986 and is led by managing directors Rock Morphis, David McClellan and Paul Wallace.

Morphis previously founded ProSeed and US Radiosurgery, while McClellan was an associate administrator at Hospital Corporation of America. Wallace joined Heritage in 2011, after holding roles including venture partner at SV Life Sciences, general partner at Petra Capital Partners and managing director at Gilbert Global Equity Partners.