KKR & Co. has closed a $1.45 billion fund targeting growth-equity deals in the health-care sector, where medical innovation is creating significant opportunities for investment.
The private equity firm, co-run by Henry Kravis and George Roberts, will invest $265 million of its own capital in the KKR Health Care Strategic Growth Fund, according to a statement Wednesday. Public pension funds, family offices and insurance companies also contributed capital to the new pool, which will invest in “health care-related companies advancing innovative products or services,” KKR said.
The New York-based firm, which has invested about $12 billion in healthcare over more than 20 years, plans to use its latest fund for companies focused on such areas as clinical innovation, cost containment and consolidation of therapeutic offerings, according to the statement. KKR Health Care Strategic Growth is the firm’s first fund dedicated to high-growth investments in the sector, according to a person familiar with the matter.
“The healthcare sector has demonstrated strong fundamentals throughout multiple cycles,” Ali Satvat, head of the fund’s investing efforts, said in KKR’s statement. “Significant advances in medical innovation have yielded new products and services for patients, while consolidation and novel approaches to care delivery have the potential to improve clinical outcomes and reduce associated costs.”
The new fund has already invested in four deals, three of which KKR has announced, according to the person familiar with the matter.
In January, KKR Health Care Strategic Growth led a $38 million series B financing for Ebb Therapeutics, formerly known as Cerêve, which is preparing to offer a new device treating insomnia. The same month, KKR said it committed $60 million to Slayback Pharma, a generic drugmaker, and in May, the firm announced that the new fund invested an undisclosed sum in the creation of Ajax Health, which supports emerging medical-device companies.
The fourth investment made by the new fund should be announced early next year, the person said.
Beyond its growth-equity strategy, the private equity firm’s healthcare portfolio includes investments in Arbor Pharmaceuticals, Panasonic Healthcare and Coherus Biosciences, according to its website.