Highland Capital Management Korea, an affiliate of Dallas-based alternative investment management firm Highland Capital Management, has closed a healthcare-focused private equity fund, with approximately USD147 million of total capital commitments.
South Korea’s National Pension Service (NPS) served as the anchor investor.
Highland’s private equity fund is its first healthcare sector-specific undertaking in Asia. While Asian investors have shown increased interest in the sector during the past two years, most investments made to date were on a direct basis or via multi-purpose funds.
Investors participating in the Highland fund with NPS Korea have specific objectives within the healthcare space in addition to investment returns. This includes access to opportunities for co-investment in order to serve their strategic objectives in Korea, China and the US.
Highland’s expertise investing in healthcare spans almost three decades. In Asia, Highland will work with Stonebridge Capital, a Korean private equity and venture capital firm, which will co-manage the fund.
“The fund’s strategy is well aligned with Highland’s core capabilities, drawing on the firm’s deep expertise in the healthcare sector,” says Carl Moore, managing director and co-head of Highland’s private equity group. “Healthcare is the firm’s largest industry exposure and roughly half of our more than 15-year track record in private equity relates to healthcare companies.”
The fund will primarily invest in middle market healthcare companies in North America and Asia.
“The healthcare industry in the US faces a number of disruptive forces that acutely affect companies in the middle market,” says Matt Jameson, managing director and co-head of private equity. “The demographic ‘greying’ of America and increased access to healthcare services in Asia are driving greater utilisation levels and more complex consumer and government demands on the sector. These factors combined with the evolution to value-based reimbursement models create significant opportunities for healthcare investors.”