Silversmith closes debut fund on $460m

The firm will invest $15m-$50m in healthcare technology with a team of 15 that will be filled early next year.

New growth equity firm Silversmith Capital Partners has closed its debut fund on $460 million, beating its $350 million target, managing partner Jim Quagliaroli told Private Equity International.

Fundraising began in May and Silversmith Capital Partners I reached its hard cap after what co-founder Quagliaroli called “a very busy May, June and July”. It finished fundraising on 18 August.

“We’re delighted with that outcome and feel good that the message resonated with our LPs,” Quagliaroli said.

The fund will seek equity investments between $15 million and $50 million, although Quagliaroli thinks it has the capacity to go larger in select situations. It will focus on technology, software service, information service technology, healthcare IT platforms and healthcare services sectors.

“The new firm has a very simple mandate, which is to support entrepreneurs and profitable healthcare technology companies,” Quagliaroli said.

He co-founded Silversmith with managing partners Jeff Crisan and Todd MacLean, and operating partner Lori Whelan. Quagliaroli said Crisan and MacLean had been friends since university, and he and MacLean met at Summit Partners in the mid-90s. He and Crisan have been friends and co-investors in the private healthcare industry for over 20 years, he added.

“In many ways we think our strategy is a return to what a lot of firms were doing back in the 1990s where this is not a strategy to pursue unprofitable unicorns,” Quagliaroli said. “We’re trying to invest in profitable growth companies that are stable; fast generating businesses in segments where we have experience.”

Silversmith expects a team size of 15 people in its Boston office by early next year and has already made some senior hires.

Silversmith received a $25 million commitment from the University of Michigan in mid-July, according to PEI’s Research & Analytics division. Its investors included university endowments, insurance companies, fund of funds and financial institutions, said Quagliaroli.

The Monument Group served as the placement agent and Proakauer Rose provided legal counselling.