Fund in focus: Gilde Healthcare closes GHS II on €100m

According to Gilde Healthcare managing partner Jasper van Gorp, the formal fundraising process only began in late September last year.

"It was already finalised in December, with more investor appetite than we could accommodate," he says. "We believe this comes from a combination of our strong track record, our healthcare services expertise and investment focus, and our hands-on investment approach. We ensured the fund size matches the market opportunity we have identified."

The fund has institutional cornerstone investors including several pension funds, insurance firms and funds-of-funds. Its LP base also includes family offices and high-net-worth individuals.

Around 35% of the fund's LP pool comprises pension funds, while insurance firms make up 15%, funds-of-funds comprise 20% and the remaining 30% coming from family offices and high-net-worth individuals. GHS II's investors are predominantly European.

"Quite a few of our LPs are active in the healthcare market themselves, which provides a great network for our portfolio companies," notes van Gorp.

Around two thirds of the fund's commitments have come from existing investors, with nearly all of GHS I's LPs returning to reinvest in Gilde's second healthcare services fund and "most of them increasing their commitment", van Gorp adds. GHS I, the predecessor of GHS II, launched in March 2009 and held its final close on more than €50m in October 2011, according to unquote" data.

The fund will focus its investments on healthcare service companies based in the Benelux region and Germany. Specifically, the fund will target companies operating within the areas of specialist clinics, elderly and primary care, mental health, outsourcing services and medical product suppliers.

"We focus on companies that provide better care at lower costs. In order for companies to be successful in today's market we believe they need to have an angle on competition," says van Gorp. "On the one hand, this has to translate to optimal healthcare. However, given the budget constraints of governments and insurance companies, healthcare provision also needs to be cost efficient. This, for example, provides great opportunities for companies that provide outsourcing services to healthcare providers, which improve the quality of their services but at the same time reduce costs."

Thriving market
The Benelux region's healthcare industry has gone from strength to strength over the past year, with Gilde's latest fundraising achievement acting as testament to this. In October last year – not long after his firm had begun fundraising for its latest endeavour – Gilde Healthcare managing partner Pieter van der Meer spoke to unquote" about the thriving healthcare market in the region. "In our view, Benelux is at historic heights," he noted at the time.

"The European healthcare services market is undergoing fundamental changes, which provides opportunities for companies with a strong and differentiated offering," adds van Gorp. "The healthcare services sector is one of the largest sectors in most European economies, with about 10-15% of GDP. Within this market we see a lot of vibrant subsectors with entrepreneurs building great companies."

GHS II will provide average equity tickets of €5-15m, with the option to participate in larger deals. It will acquire majority stakes and plans on making eight to ten investments over its lifespan.

The fund has a lifespan of 10 years with a five-year investment period. The firm did not use any placement agents for the fund, while legal advice was provided by Clifford Chance.

In conjunction with the fund's announcement, Gilde has also announced the appointment of Matteo Racca as an investment manager. Racca has joined Gilde following a stint as engagement manager at McKinsey & Company. Prior to that he worked as an investment professional at Dutch mid-market private equity firm Parcom Capital.

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• Topics
• Venture
• Healthcare
• Benelux
• Fund in focus
• Gilde Investment Management
• Netherlands
• Unq2015Feb