Vivalto to close first EUR 700m fund in summer

Rachel Lewis
28 January 2022

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Vivalto Partners, a new GP specialising in healthcare, is targeting a summer close for its first EUR 700m fund, partner Yonel Génin told Unquote.

The fund, Vivalto Capital I, held its first close in July 2021 on EUR 450m, after agreeing to acquire Vivalto Santé, France's third-largest hospital group by revenue.

"Since that deal closed we are continuing our fundraising," Génin said. "We are worth EUR 500m now; we'll keep on working until maybe the summer with a target of around EUR 700m."

"We now have the dry powder to execute two transactions and we're very active on the market for doing other deals too," Génin said, adding that the firm hopes to close one deal before the summer.

The fund will take controlling stakes in profitable businesses in the healthcare sector, deploying tickets of EUR 20m-150m in seven or eight transactions.

"We have several LPs who are very keen on co-investing alongside us, which is why we can go so high. Otherwise, it's going to be more like EUR 40m-45m," Génin said.

Vivalto Capital I will focus on four healthcare verticals. The first, patient services, includes primary care, home care and speciality care, but the GP has ruled out nursing homes on the basis that returns will be too low for a private equity firm.

The second target vertical is B2B healthcare services, like contract management organisations (CMOs). The third looks at medical devices, and the fourth, which Génin expects to be less active, is consumer health.

The fund's tickets will mostly be invested in France, but one or two could be in Benelux, Switzerland and southern Europe. It expects to remain invested along the traditional private equity timeline of four to five years.

The fund's LPs are largely made up of the former co-owners of Vivalto Santé, before Vivalto Partners took a controlling stake in December 2021. These include insurer MACSF, PE fund Arkéa Capital, bank BNP Paribas, coop bank Crédit Agricole, and sovereign wealth funds Mubadala and BPI France.

Two new investors, IK Partners and Hayfin, joined the Vivalto Santé LBO.

Vivalto Capital is managed by Vivalto Santé's founder, Daniel Caille, as well as four investment professionals (Yonel Génin, Sébastien Alauzet, Laurent Dethomas and Charles-Eric François) and two healthcare professionals (Aurélien Faré and Guillaume Caille).

The fund also encourages doctors working within its portfolio companies to become investors; the GP made a public offering for 1,000 doctors at Vivalto Santé to become shareholders.

The strategy at Vivalto Santé is to consolidate around 200 individual hospitals at a regional level, as most small to medium-sized hospital groups in France have now been consolidated.

As for future investments for the fund, Génin says it is working on a few transactions before the end of the year: "Valuations are quite high and haven't gone down. We're looking for typical returns of 2.5x or above, so for doing that you either go into buy-and-build platforms or you have a clear view of organic growth.

"We don't expect valuations to go down in the next few years. There's quite a long-term strong appetite for the healthcare sector here in France. It has shown to be really stable in terms of support by governments and the Ministry of Health. So for these reasons, we would think that values should stick to the same level."