The partners at boutique investment bank Provident Healthcare Partners (PHP) have committed $25m for its first corporate venturing fund.
Its subsidiary, Provident Healthcare Ventures, will manage the inaugural Principals Fund I. The fund will invest between $250,000 and $3m in three to six early-to-late-stage healthcare services companies each year.
Bob Ciardi, managing partner at PHP, which has advised on more than 100 deals acting only for the vendor, said he would be one of the principal investors in the fund and added: "Provident Healthcare Ventures is a natural extension of what we’ve done for more than a decade."
William Shepard, managing director of Provident Healthcare Ventures will manage the fund, which will reinvest proceeds from its portfolio under an evergreen model. He said about 5% to 10% of its calls received at the merchant bank were from chief executives not looking to exit but to raise capital. He added: "PHP’s proven ability to identify quality companies and strong management teams at an early stage, and then exit at significant premiums, is the cornerstone of all successful venture investments."
As well as money, Provident will provide business development, legal, accounting, clinical, compliance, and operational assistance to its portfolio companies. Shepard said: "We expect to do five deals in the first nine to 12 months and have received 200 business plans in the first five weeks of operation and confirmed this as the perfect time and sector to be in."