March 1, 2024 (Preqin News) – New York-based private equity firm Avista Capital Partners has announced the final close of its latest dedicated healthcare fund above target at $1.5bn.
Avista Healthcare Partners VI, which had a $1.3bn target, is 25% larger than its predecessor fund, the firm announced Friday. The vehicle, the firm’s third dedicated healthcare fund, will concentrate on investments in high-growth middle-market product and technology healthcare companies in North America and Europe and has already made five platform investments.
Commitments were secured from investors including public and private pension funds, university endowments and foundations, family offices, insurance companies, and asset managers across North America, Europe, Asia, and the Middle East.
‘The closing of Fund VI is an endorsement of our long-held strategy of identifying and accelerating growth-oriented healthcare businesses with strong secular tailwinds,’ David Burgstahler, Chief Executive Officer of Avista, said in a statement.
Avista, founded in 2005 as a spin-out from DLJ Merchant Banking, has over $8bn invested in more than 45 healthcare businesses worldwide. The firm focuses on six core healthcare sub-sectors which it says benefit from ‘strong tailwinds’: outsourced pharma and medtech services; consumer healthcare; medical devices; specialty & generic pharmaceuticals; distribution and diagnostics; and healthcare technology.
Last month, the firm announced its acquisition of Spanish dental prosthetics provider Terrats Medical from Miura Partners.
Despite challenging macroeconomic and geopolitical conditions, the healthcare sector remained a center of private equity deal activity in 2023, Bain & Company announced in its latest Global Healthcare Private Equity Report.
Investors are likely to focus on the transformative nature of several themes in the sector in 2024, including healthcare IT which, it said, ‘continues to attract investment due to its ability to drive innovation and offset macro factors such as inflation, labor shortages, and reimbursement headwinds.’
According to survey results published in KPMG’s 2024 Healthcare and Life Sciences Investment Outlook, 61% of respondents expect more deals in 2024 compared to 2023 amid expectations of easing economic and industry headwinds. The survey also found that 50% expect valuations to increase in 2024, compared with 30% of respondents who expected a decrease.
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