HarbourVest buys CalPERS’ stake in Health Evolution fund

Health Evolutions' growth fund invested in prosthetic device-maker Freedom Innovations and hospice operator Halcyon Healthcare.

Fund of funds firm HarbourVest Partners has bought CalPERS’ stake in Health Evolution Partners’ growth fund. The pension was the fund’s only limited partner.

CalPERS invested with both of Health Evolution Partners’ funds, a fund of funds and a growth fund, in 2007 and 2008, respectively, according to PEI data. CalPERS began looking for a buyer for its stake in the $500 million growth fund, in which it was the sole investor, in the middle of last year.

Landmark Partners was another bidder for the Health Evolution Partners Growth Fund.

While HarbourVest ended up buying the majority of CalPERS’ shares, unnamed co-investors were reportedly also part of the deal.

Health Evolution Partners is headed by managing partner and CEO Daniel Brailer, a former advisor to President George W Bush. Brailer was the first national co-ordinator of healthcare information technology.

“My partners and I are delighted to have the backing of world class investors like Harbourvest and their partners,” said Brailer in an email to Secondaries Investor’s sister title Private Health Investor. “We look forward to working with them to build successful health care middle market companies and to take the Health Evolution Partners franchise to new levels.”

The Health Evolution Partners Growth Fund had a net internal rate of return of 2.7 and an investment multiple of 1.1x as of 30 September 2014, according to CalPERS.

Health Evolution Partners currently has five companies remaining in its growth fund portfolio, according to its website, including Censeo Health, a health risk assessment company; prosthetic device-maker Freedom Innovations; hospice operator Halcyon Healthcare; Kisimul, provider of special education and long-term care in the UK; and Prolacta Bioscience, which produces human milk-based nutritional products.

HarborVest had not responded to a request for comment on the deal by press time.