Provident launches $25M healthcare fund

Tuesday, November 23, 2010

BOSTON - As far as Provident Healthcare Ventures is concerned, there's plenty of blue skies over certain sectors of the home health services market.

That's why it has created a $25 million fund to invest in young home infusion, HME, specialty pharmacy and other healthcare companies.

"No one out there is investing in these early stage healthcare services companies," said Bob Ciardi, managing partner of Provident Healthcare Partners, which created the new venture company. "There are a lot of great companies and we are very bullish on this opportunity."

All capital invested in the fund comes from the fund's principals. Investments will range from $250,000 to $3 million and Provident will also provide operational and organizational support to help the businesses grow.

"Capital is one thing, but we are looking more to invest alongside current ownership and management teams and take them to the next level more quickly than they could get there on their own," said Ciardi.

While the projected investment amounts might seem small, there is actually a lot of demand in that price range, said Bill Shepard, managing director of Provident Healthcare Ventures.

"Companies that are looking for a smaller recapitalization--no one pays those CEOs any attention," he said. "We will."

Despite national competitive bidding and other reimbursement challenges, home care is the "wave of the future," said Ciardi.

"If you look at the lowest cost way to care for the patient, it's in the home, where home infusion and HME are," he said. "The outcomes are better and that's where the patients want to be."

Provident seeks to invest in three to six companies per year and plans to reinvest gains from its investments back into the fund. With no outside investors to answer to, Provident is under no pressure to try and make a quick buck.

"We will be in it for the long haul," said Shepard. "We will grow these companies side by side with their management and we'll carry it through to a mutual exit--wherever and whenever that may be."