Kudu Investment Management buys stake in Healthcare Secondary company

Kudu Investment Management has acquired a stake in a company similar to itself and focused on the healthcare sector.

Kudu said it is now a minority owner of Revelation Partners, one of the leading asset managers in the healthcare secondary market. Revelation remains employee-owned and controlled and will continue to be led by co-founders and managing partners Scott Halsted and Mike Boggs. Terms of the deal were not disclosed.

Revelation, based in Sausalito, California, was founded in 2013 and specializes in providing capital to investors, companies, limited partners and general partners in the healthcare industry. It has more than $1.5 billion in committed capital, including its fourth flagship fund that raised $608 million and closed October 2023. It is currently invested in more than 50 companies.

“We have seen record deal flow over the past two years, and Revelation is experiencing strong demand for our strategy of providing liquidity in the illiquid market for private healthcare companies,” said Boggs. “We are excited to partner with Kudu, which has the capital and expertise to help us continue to optimize our large set of opportunities.”

Revelation says it has grown at an annualized rate of more than 40 percent over the past six years, a reflection of the expanding healthcare sector. More than $200 billion has been invested in private health care companies over the past three years, according to the National Venture Capital Association, but the IPO market has been dismal. Revelation offers founders and other stakeholders of healthcare companies a liquidity alternative to taking a company public.

Kudu CEO Rob Jakacki said in a statement that Revelation has built an “impressive franchise” in an exciting and evolving area of ​​asset management.

The participation in Revelation is the first deal Kudu has announced this year. In 2023, that was another robust year for GP investorsKudu invested in four asset managers: credit specialist and interval fund manager Variable investments; private equity company focused on health Martis Capital Management; private debt manager Apera Asset Management; and (mostly) fixed income investor Sage Advisory Services.

Since its founding in 2015, New York-based Kudu has invested in 28 asset and wealth managers in the US, Canada, UK and Australia. Its portfolio companies collectively invest approximately $129 billion for investors. It is backed by White Mountains Insurance Group and MassMutual.