Revelation raises $350m for healthcare secondaries

Revelation Partners will invest in direct positions, LP stakes, GP-led deals and to provide follow-on capital in the healthcare sector.

The world’s only healthcare secondaries specialist has closed its latest fund on hard-cap.

San Francisco-based Revelation Partners has collected $350 million for Revelation Healthcare Fund III, exceeding its target of $300 million, according to a statement. The fund will invest across all healthcare sub-sectors, including medical devices, diagnostics, biotech, healthcare technology and healthcare services.

Founder and managing partner Scott Halsted, said in the statement: “With the tremendous amount of private capital that has flowed into the healthcare space over the last several years, our limited partners continue to see the attractive opportunity for Revelation Partners to provide liquidity in this illiquid market.”

Predecessor Fund II raised $227 million by final close in June 2018, as Secondaries Investor reported. Halsted said at the time that Revelation mainly acquires direct positions in healthcare companies and can also buy fund stakes, back GP-led processes and provide follow-on capital for managers that need more money to grow their portfolio companies.

“Healthcare tends to be one of those areas with the longest holding periods from first investment to exit,” he said in a separate Q&A with Secondaries Investor the same month. “The number moves around a little but six to eight years is the typical holding period. But it’s really a bell-shaped curve – there are companies that exit early and others that don’t exit until year 10, 11 or 12.”

Healthcare stakes tend to trade at anywhere from a 25-35 percent discount to net asset value, he added.

The firm was formed in 2015 as a result of a partnership between principal investment business Leerink Capital Partners and direct secondary Revelation Partners. It manages more than $900 million of committed capital.