Healthcare PE Quadria Capital targets up to $700m investment capacity for new fund

Dr Amit Varma, managing partner, Quadria

Singapore-based healthcare-focused private equity firm Quadria Capital aims to raise up to $700 million, including a $100-200 million co-investment pool, for its fourth fund, managing partner Amit Varma told this portal.

“Based on the active deal flow we are seeing across the region and the fact that ticket sizes have gone up from the initial $30-50 million to almost $75 million now, we expect to be able to deploy that capital on the ground,” Varma said.

Quadria had raised $300 million for its Fund I in 2015. The fund had a total investment capacity of $425 million after it accumulated an additional $125 million in co-investments. To capture the potential of the healthcare sector at an early stage, the two promoters of Quadria floated Healthquad which closed at $12 million last year.

The latest fund, Quadria Capital Fund II, is expected to see most of Fund I LPs return to inject capital, Varma added.

This portal had earlier reported that Quadria was planning to raise a new fund and fully deploy its Fund I this year. According to Varma, the PE firm will also be looking to exit one or two of its investments from Fund I by the end of the year.

“Our LPs have not been pushing us to do an exit for the sake of raising another fund. They have been very supportive of holding on and creating further value. The reason they support our new fundraising is that they’ve looked at our deal flow and realised the value of not sitting this out and continuing to put in capital,” he said.

Having said that, he clarified that the firm is not extending the tenure of Fund I as the 2014 vintage fund has a runway up to 2020-2021.

Competition for healthcare deals has heated up as sector-agnostic funds vie for a slice of the action, pushing up valuations. Varma said Quadria prefers to look at proprietary deals and avoid participating in a bidding process that might result in overpaying for a deal.

“Out of the nine deals that we have done so far, we have never had a high-teen multiple valuation. Most of our deals, if not all, are proprietary. We have a bunch of healthcare guys who have only run healthcare companies, so we are able to convince the companies to take up a saner valuation,” he added.

Quadria was founded in 2010 by Varma and Abrar Mir, both former senior executives at India’s Religare Group. Varma is a physician with over two decades of clinical experience and has previously led the international expansion initiatives at India-based Fortis Healthcare. Law graduate Mir has spent an equal amount of time in the PE, investment banking and healthcare spaces.

On healthcare as a platform, Varma said the approach is certainly “easier said than done” as Quadria believes in investing in the fundamentals of a company with a proven business model.

“And if the proven business case is in the platform model, we’ll be happy to do it. If not, there is enough scope to build tangible businesses which have the right scale and size. We invest in key market leaders which could become a regional platform but having said that, we also have standalone cases in our portfolio where these single assets are growing into requisite sizes [to create exits],” he said.

Varma also shared that for a GP to be successful in Asia, a certain level of autonomy must be in place. In other words, Quadria would prefer not to have a single investor overriding the fund.

“There are larger investors who have suggested us with larger checks but in Quadria, we believe in having a diversified LP base to retain our independence and freedom in investments and exits,” he added.

Quadria has invested in Malaysian diagnostics provider Lablink (M) Sdn Bhd, and India’s Strand Life Sciences earlier this year. It has also invested in FV Hospital (FV) in Vietnam and acquired a significant stake in Singapore’s MWH Holdings, the holding company for the Singapore Heart, Stroke and Cancer Centre.

Currently, Quadria has over $1.5 billion worth of assets under management and 18 investments across Asia. It is also managing over 70 hospitals across the region.

Overall, Asia has seen a record of dry powder pouring into the region, as larger buyout firms including Greater Pacific Capital and Japan’s SoftBank Group are increasing their fund sizes, where the former is said to have recently made the first close of its $700-million India fund while the latter is said to be mulling a $5-billion Asia-focused fund.

Other Asia-focused vehicles on the road include CVC Capital Partners, which is raising a $4-billion fund, and Baring Private Equity Asia, which is seeking up to $6 billion for its seventh fund and has hit the first close at $4.5 billion.

Beyond global firms, the region is also mushrooming with smaller PE firms that are increasingly raising larger vehicles. Singapore-based Altair Capital has made the first close of its $150-million maiden ASEAN fund that is targeting healthcare, among other sectors, for investments. Esco Group has also announced its plan to raise up to $100 million for a spin-off fund to invest in life sciences companies.

Also Read:

High valuations in Asia often reflective of growth opportunities: Abrar Mir, Quadria

India: Strand Life Sciences raises up to $13m from Quadria Capital

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.