The firm raised more than the €500 million target it initially specified after the fund was “significantly oversubscribed”, the firm’s founders told FN’s sister publication Private Equity News.
The firm initially set a €600 million hard cap but raised it following discussions with investors due to high demand.
The firm collected capital from investors around the world, including pension funds, sovereign wealth funds, insurance companies, funds of funds, family offices and high net worth individuals, the firm said.
GHO launched its fundraising in October 2014 and had collected capital by July 2016, the firm said. Just over 40% of the capital came from investors in North America, while 31% came from Europe and 28% from the rest of the world.
The team was co-founded by Mireille and Dennis Gillings, two high-profile entrepreneurs in the healthcare space. Mireille Gillings, who is the non-executive vice chair of GHO Capital, founded HUYA Bioscience International, a pharmaceutical company in China, while Dennis Gillings founded Quintiles and is still chairman of that business.
The firm is led by Alan MacKay, who spent 23 years at London-based 3i Group as a senior partner and global head of healthcare and later spearheaded Hermes GPE as managing partner from 2010 to 2013. Other founding partners include Andrea Ponti, who set up the European investment banking healthcare franchises at JP Morgan and Goldman Sachs; Mark Braganza, a former investment executive at TPG’s healthcare team; and Michael Mortimer, a former executive vice president at Quintiles.
Adam Turtle, co-founder of Rede Partners, which acted as the placement agent on the fundraising, said: “GHO is one of the most developed first-time funds we have ever worked on. They immediately had a large team and the Gillings healthcare network was very powerful. GHO is one of the largest first time funds in Europe.”
MacKay said that the backing of the Gillings – who also made a significant cornerstone investment in the fund – helped the firm get off the ground.
“Both of them have deep healthcare expertise and that confidence that they placed in giving us a cornerstone investment also gave other investors the confidence that we were credible investors,” he said.
GHO will invest in European healthcare businesses with enterprise values of between €100 million and €400 million. It will focus on medical licences and diagnostics, business to business and patient services. GHO will assist European healthcare businesses to expand internationally.
The firm will look to invest in between nine to 12 companies. Terms on the fund are standard, the firm said. Private equity firms typically charge a management fee of between 1.5% and 2% and after hitting the 8% preferred return they usually take 20% of the profits or carried interest.