Goldman, Blackstone, TPG line up on single-asset continuation fund

Goldman Sachs Asset Management has taken the lead on an over $700 million healthcare-adjacent single-asset continuation fund vehicle with Blackstone Strategic Partners, Portfolio Advisors and TPG in co-lead position on the transaction, Secondaries Investor has learned.

San Francisco-headquartered mid-market investor Calera Capital is moving US healthcare laundry service company ImageFIRST into a separate vehicle, according to five sources familiar with the matter.

Calera initially backed ImageFIRST in 2018, acquiring a majority stake in the business via its 2017-vintage $555 million Calera Capital Partners V, according to a statement at the time. The vast majority of LPs will sell in the transaction, four sources said.

The transaction is understood to have been oversubscribed, according to the five sources. It also attracted premium pricing, according to four of the sources. The continuation vehicle is also understood to have a super carry component, two of the sources said.

Jefferies is understood to be advising on the deal.

Calera did not return a request for comment at press time, while Blackstone Strategic Partners, Goldman Sachs, Portfolio Advisors, TPG and Jefferies all declined to comment.

The ImageFIRST continuation fund transaction is the latest in a number of healthcare-related GP-led continuation funds that have closed in recent weeks. Charterhouse Capital Partners in May closed a single-asset continuation fund deal involving specialty pharmaceutical group SERB in a process backed by Goldman, CPP Investments and Hamilton Lane, Secondaries Investor reported last week.

At the end of last month, it emerged that GHO Capital Partners had completed a secondaries transaction for global contract development and manufacturing organisation Sterling Pharma Solutions, with a spokesperson for GHO confirming to Secondaries Investor that AlpInvest Partners and Pantheon were lead buyers on a single-asset continuation fund. Jefferies also advised on that transaction.

Healthcare assets make up a meaningful proportion of continuation fund opportunities, market participants have told Secondaries Investor. Many assets within the sector have strong downside protection and meaningful upside potential with a strong pipeline of potential exit avenues. This combination ticks a large majority of secondaries buyers’ boxes for due diligence.

LPs are also bullish on healthcare and pharmaceuticals with 87 percent of investors signalling they’re attractive sectors for private equity investment over the next two years, according to Coller Capital‘s Global Private Equity Barometer Summer 2023.

Calera Capital primarily invests in two sector verticals: business services and specialty industrials. It is in market with its latest flagship Calera Capital Partners VI, which launched in 2021 with an undisclosed target, according to Private Equity International data.