Heritage Group, a Nashville, Tenn.-based venture capital and growth equity firm focused on the healthcare sector, has closed its second fund with around $220 million in capital commitments. This is a step-up from the $170 million that Heritage raised for its debut fund in 2011.
Heritage managing director Paul Wallace says that there are no financial institutions serving as limited partners, as the firm prefers strategic LPs like Cardinal Health (CAH), Cerner Corp. (CERN), Community Health Systems (CYHHZ), Intermountain Healthcare, and Tenet Healthcare (THC).
In that way, it’s a bit like an outsourced corporate VC group with more traditional compensation (even though several of its LPs have their own direct investment programs).
“Their engagement and involvement drives deal origination,” Wallace explains, adding that Heritage spends a lot of time learning what the current plans and interest of its large strategic partners. Moreover, the LPs can aid with commercialization for earlier-stage portfolio companies.
Active Heritage portfolio companies include AwarePoint, MDLive, Sharecare and Vivify Health.