Blue Heron Capital primarily invests in health care, IT and services companies. (Screenshot)
Fresh off a new investment in a Boston-based health care tech company, a local private equity firm has begun to line up its second pool of cash, this time shooting for a fund nearly three times the size of its first one.
Blue Heron Capital is looking to raise $75 million, according to an SEC filing last week, to continue its model of investing in primarily health care, IT and services companies that need a capital injection for growth.
The new fund, called Blue Heron Capital Fund II, it would eclipse its Fund I, which was capped in 2013 with $25.5 million and an additional $8 million to $10 million in matching funds from its investors.
Tom Benedetti, who launched Blue Heron with fellow managing partner Andrew Tichenor in 2010, said they’ve begun shopping around Fund II and expect to fill it out in 10-12 months.
Sticking with a strategy that proved successful with Fund I, the second round initially will target individual investors who have built and sold businesses, or have been C-suite executives.
Tom Benedetti
Benedetti said the firm refers to them as “operating advisors,” in that they invest money in the pool and agree to engage in the companies the fund invests in, often with seats on the board.
Its list of operating advisors spans nationwide and also includes some big Richmond names, such as former Philip Morris CEO Cliff Fleet; former Genworth CEO Michael Fraizer; Mark Hourigan, owner of construction and development firm Hourigan; and WestRock Chairman John Luke.
Among the new arrivals to the group is Gaylon Layfield, founder and former CEO of Xenith Bank, a Richmond bank that was acquired earlier this year by local peer Union Bank & Trust.
The new fund also will go after institutional investors and high-net-worth families.
Blue Heron’s funds look to invest in businesses with $5 million to $25 million in revenue that have an established customer base, a working product and an established management team.
The fund typically holds onto its investments for three to five years before it makes an exit, primarily by facilitating a sale of the companies.
It hit on such an exit in July, when it cashed out on its investment in McLean-based Avizia, which allows health care providers to interact with patients virtually.
Outside of both Fund I and II, Blue Heron in October announced an additional investment in CSA Medical, a company in Massachusetts that makes cryotherapy sprays to treat ailments such as esophageal cancer and COPD.
Blue Heron was part of a group that put $23 million into CSA, a pool led by Horizon Technology Finance. Benedetti would not say how much Blue Heron put into this round, but said the firm has invested previously in CSA. The first time came in 2011, before Blue Heron had employed a fund structure. The money from this latest investment was left over from that initial structure and was not from Fund I.
Benedetti said it went back into CSA as it eyes another successful exit.
“We think this is starting to come to a great conclusion over the next 15-24 months,” he said.
As it works its fundraising channels, Blue Heron awaits a move of its headquarters from the Stony Point office park on the Southside to Scott’s Addition, where it will take space in The Spur, a new mixed-use development at the old Phipps & Bird facility at 1519 Summit Ave. and 3015 Moore St.
Blue Heron Capital primarily invests in health care, IT and services companies. (Screenshot)
Fresh off a new investment in a Boston-based health care tech company, a local private equity firm has begun to line up its second pool of cash, this time shooting for a fund nearly three times the size of its first one.
Blue Heron Capital is looking to raise $75 million, according to an SEC filing last week, to continue its model of investing in primarily health care, IT and services companies that need a capital injection for growth.
The new fund, called Blue Heron Capital Fund II, it would eclipse its Fund I, which was capped in 2013 with $25.5 million and an additional $8 million to $10 million in matching funds from its investors.
Tom Benedetti, who launched Blue Heron with fellow managing partner Andrew Tichenor in 2010, said they’ve begun shopping around Fund II and expect to fill it out in 10-12 months.
Sticking with a strategy that proved successful with Fund I, the second round initially will target individual investors who have built and sold businesses, or have been C-suite executives.
Tom Benedetti
Benedetti said the firm refers to them as “operating advisors,” in that they invest money in the pool and agree to engage in the companies the fund invests in, often with seats on the board.
Its list of operating advisors spans nationwide and also includes some big Richmond names, such as former Philip Morris CEO Cliff Fleet; former Genworth CEO Michael Fraizer; Mark Hourigan, owner of construction and development firm Hourigan; and WestRock Chairman John Luke.
Among the new arrivals to the group is Gaylon Layfield, founder and former CEO of Xenith Bank, a Richmond bank that was acquired earlier this year by local peer Union Bank & Trust.
The new fund also will go after institutional investors and high-net-worth families.
Blue Heron’s funds look to invest in businesses with $5 million to $25 million in revenue that have an established customer base, a working product and an established management team.
The fund typically holds onto its investments for three to five years before it makes an exit, primarily by facilitating a sale of the companies.
It hit on such an exit in July, when it cashed out on its investment in McLean-based Avizia, which allows health care providers to interact with patients virtually.
Outside of both Fund I and II, Blue Heron in October announced an additional investment in CSA Medical, a company in Massachusetts that makes cryotherapy sprays to treat ailments such as esophageal cancer and COPD.
Blue Heron was part of a group that put $23 million into CSA, a pool led by Horizon Technology Finance. Benedetti would not say how much Blue Heron put into this round, but said the firm has invested previously in CSA. The first time came in 2011, before Blue Heron had employed a fund structure. The money from this latest investment was left over from that initial structure and was not from Fund I.
Benedetti said it went back into CSA as it eyes another successful exit.
“We think this is starting to come to a great conclusion over the next 15-24 months,” he said.
As it works its fundraising channels, Blue Heron awaits a move of its headquarters from the Stony Point office park on the Southside to Scott’s Addition, where it will take space in The Spur, a new mixed-use development at the old Phipps & Bird facility at 1519 Summit Ave. and 3015 Moore St.