CalPERS-Backed Health Care Fund Outlines Investment Strategy
On Monday, David Brailer, head of the private equity fund Health Evolution Partners and the former National Coordinator for Health IT, detailed the firm's strategy for investing its inaugural $700 million commitment from CalPERS, the San Francisco Business Times reports. Brailer made the announcement at the 20th annual Bear Stearns health care conference in New York City (Rauber, San Francisco Business Times, 9/10).
Brailer said the fund will invest $500 million to acquire both majority and minority interests in companies. The individual investments -- which Brailer characterized as "growth and late-stage investments" -- will range from $10 million to $80 million (Conn, Modern Healthcare, 9/10).
Another $100 million will be invested in early stage and venture investment funds, while the final $100 million may be co-invested "in portfolio companies alongside our partners," Brailer said (Health Evolution Partners' Investment Strategy document, 9/10).
Health Evolution Partners next spring might consider adding more partners, Brailer said.
Brailer said that investments will span a range of health care, information and diagnostic services (Monegain, Healthcare IT News, 9/10). The fund's plans call for investments in companies with products that:
- Address quality and safety issues;
- Support appropriate use of medical services and prescription drugs;
- Shore up the efficiency of health care processes and boost transparency efforts; and
- Help consumers manage their health care costs (San Francisco Business Times, 9/10).
Given Brailer's experience as national coordinator for health IT, the Business Times expressed surprise that health information technology was not highlighted specifically in the investment strategy (San Francisco Business Times, 9/10).
Brailer said, "Our focus is not at all in IT companies." He added, "I'm into information services."
Brailer said his firm is in negotiations with several companies, but he did not reveal the names of those companies (Modern Healthcare, 9/10). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.