NEW YORK, July 9, 2018 – Health Enterprise Partners (HEP), a leading growth equity firm focused exclusively on healthcare IT and services, today announced the successful final close of its third fund, HEP III. The fund was significantly oversubscribed, hitting its hard cap with total capital commitments reaching $188 million. This achievement underscores the strong investor confidence in Health Enterprise Partners’ unique approach and proven track record within the health enterprise sector.
HEP III will continue the firm’s successful strategy of investing in innovative healthcare IT and healthcare service companies. A key differentiator for Health Enterprise Partners is its exceptional base of strategic limited partners (LPs). These LPs are not just financial backers; they are some of the nation’s largest and most influential healthcare organizations, making Health Enterprise Partners a truly unique player in the investment landscape.
Across its three funds, Health Enterprise Partners has cultivated an unparalleled network of payers, providers, and healthcare entities. This extensive network comprises 40 industry leaders, representing an impressive 300 hospitals, 125 million covered lives, and 850,000 employees across the United States. This powerful coalition provides Health Enterprise Partners and its portfolio companies with strategic insights and unparalleled access to the healthcare market. Alongside these strategic industry participants, HEP also benefits from the support of a number of prominent financial investors as limited partners.
“HEP’s industry connectivity is strong and broad, providing unique value beyond capital,” noted Bert Zimmerli, EVP and CFO of Intermountain Healthcare. “We see Health Enterprise Partners’ model of identifying investment opportunities that directly address critical challenges faced by healthcare stakeholders as a vital part of our innovation and business development strategy.” This strategic alignment with industry needs is a core tenet of Health Enterprise Partners’ investment philosophy.
Cecil Kost, Chairman & CEO of InDemand Interpreting, further emphasized the strategic advantage of partnering with Health Enterprise Partners. “In today’s market, the real strategic value offered by private equity firms can vary significantly and is often overstated. The Health Enterprise Partners team has developed a distinctive model for creating measurable value through its deep industry relationships. They hold themselves accountable for actively helping their portfolio companies achieve enhanced results after investment. We consider HEP a genuine extension of our management team,” Kost stated. This perspective highlights the hands-on, collaborative approach that Health Enterprise Partners brings to its partnerships.
Since the launch of its first fund a decade ago, Health Enterprise Partners has consistently applied a proven investment strategy across various industry cycles, regulatory shifts, and significant healthcare delivery system restructurings. “Throughout this period, we have maintained a consistent investment strategy and have been fortunate to collaborate with some of the most accomplished management teams and organizations in the healthcare sector,” said Dave Tamburri of Health Enterprise Partners. This consistent approach and focus on long-term value creation sets Health Enterprise Partners apart in a dynamic industry.
Mark Bartlett, Executive Vice President and Chief Financial Officer of Blue Cross Blue Shield of Michigan, highlighted the importance of the team behind Health Enterprise Partners. “Like running a successful company, executing a successful investment strategy hinges on the strength of the team. In choosing Health Enterprise Partners as an investment partner, we carefully examined the extensive experience of their core team in scaling and successfully exiting healthcare IT and services platforms,” Bartlett explained. This emphasis on team expertise and experience is a critical factor for strategic investors.
Health Enterprise Partners has a strong track record of successful investments and acquisitions. Companies previously acquired by Health Enterprise Partners portfolio companies include Applied Pathways (acquired by Anthem), Behavioral Centers of America (acquired by Acadia), HealthQX (acquired by Change Healthcare), MobileMD (acquired by Siemens Healthcare), Privia Health (acquired by Brighton Health), SHYFT Analytics (acquired by Medidata), and SCIO Health Analytics (acquired by EXL). These examples demonstrate Health Enterprise Partners’ ability to identify and nurture high-growth potential companies within the health enterprise landscape.
“We are deeply appreciative of the support from both our new and returning investors in HEP III,” said Peter Tedesco of Health Enterprise Partners. “With this fund, we will continue our focus on healthcare IT and healthcare services companies that are actively addressing the most critical challenges facing payers, providers, and employers.” This ongoing commitment to solving key industry problems drives Health Enterprise Partners’ investment decisions.
In addition to its investment activities, Health Enterprise Partners is committed to thought leadership and contributing to the intellectual advancement of the healthcare industry. “UCHealth values our rich and productive dialogue with Health Enterprise Partners on the future of healthcare. We look to both the HEP team and their portfolio companies as a source of innovative ideas for solving our most pressing issues and ultimately enhancing patient care and the overall patient experience,” stated Elizabeth B. Concordia, UCHealth President and CEO. This collaboration highlights Health Enterprise Partners’ role as a thought leader and innovator within the health enterprise ecosystem.
“The pace of change within our industry is only accelerating,” added Ezra Mehlman of Health Enterprise Partners. “To remain at the forefront, we have worked diligently to establish a position at the intersection of investing, entrepreneurship, and policy. In this endeavor, we are fortunate to be surrounded by the stakeholders who are most directly shaping the future of healthcare: our LPs and our portfolio companies.” This proactive approach to understanding and anticipating industry trends is a key strength of Health Enterprise Partners.
The Health Enterprise Partners team actively shares its insights through publications such as The American Journal of Accountable Care, Hospital and Health Networks Magazine, and Futurescan. Furthering this commitment to industry discourse, Ezra Mehlman and David Tamburri co-teach a highly regarded Healthcare Investment and Entrepreneurship class at Columbia Business School, educating future leaders in the health enterprise space.
Leah Sparks, CEO of Wildflower Health, emphasized the value of Health Enterprise Partners’ expertise during fundraising. “In a competitive fundraising environment, Health Enterprise Partners’ invaluable industry connections, deep subject matter knowledge, and extensive experience in scaling healthcare companies were instrumental in our decision to partner with them. It has been a truly fantastic partnership,” Sparks said. This testimonial underscores the tangible benefits of working with Health Enterprise Partners.
About Health Enterprise Partners
Health Enterprise Partners (HEP), founded in 2006 and based in New York City, is a growth equity firm investing across the United States in healthcare services and information technology companies. HEP focuses on growth equity and small buy-outs. The firm’s first fund had committed capital of $91 million, and its second fund, raised in 2012, reached $148 million. HEP III, as announced today, totals $188 million. The Health Enterprise Partners team includes the individuals quoted above, as well as Founders Robert Schulz and Richard Stowe, and Senior Associate Elizabeth Colonna, bringing together a wealth of experience and expertise in the health enterprise sector.
*This press release is for informational purposes only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security. Investment in any investment firm is suitable only for qualified investors who fully understand the risks of such investments. Health Enterprise Partners is a registered investment adviser with the United States Securities and Exchange Commission. Investments with Health Enterprise Partners are offered only in accordance with applicable securities laws.
SOURCE Health Enterprise Partners
