Varagon Capital Partners has added another seasoned industry professional to its rapidly growing healthcare team.
The New York-based firm has hired Michael Broderick as a managing director for its healthcare group, the firm told Private Debt Investor. He will oversee origination and deal structuring for private equity-backed healthcare deals.
He was formerly a managing director at Capital One, where he focused on originating debt, equity co-investments and banking opportunities for private equity clients. Before Capital One, he was a managing director and head of healthcare leveraged finance for CapitalSource.
Healthcare is one of Varagon’s main strategies: it makes up 25 percent of the firm’s investment profile and is growing. The industry recently become a focus for the firm, according to information provided by the mid-market lender.
“Healthcare investing is in keeping with Varagon’s focus on lending to defensive industries and capitalises on middle market private equity’s increasing appetite for the sector,” Steve Warden, Varagon’s head of healthcare, told PDI.
Varagon specialises in direct lending to mainly US-based companies with an EBITDA of $10 million to $75 million, on average. Varagon is also in a partnership with Ares Capital Corporation, which increases the firm’s capacity for senior secured and unitranche lending.
“We look for healthcare businesses that provide high-quality service, deliver value and lower cost to the healthcare system and, where applicable, emphasise compliance,” Warden said.
Last month, the firm opened a new office in Chicago, which is meant to serve as a hub for the firm’s healthcare transactions.
“This was a natural next step in scaling our business, given Chicago’s vibrant private equity market and talent pool of lending professionals,” Walter Owens, Varagon’s chief executive, said.
In addition to the new office opening last month, the firm hired three other healthcare-focused investment professionals. Brian Carroll was hired as a managing director, and Amit Vyas and Evan Seidenberg were hired as vice presidents. Carroll and Vyas are based out of the new Chicago office.
While statistics from 2018 are not yet available, 2017 proved to be the biggest year for healthcare deal value globally since 2007. That figure that amounted to $42.6 billion, with North America being the most active region, according to an April report from Bain & Company.
Chicago itself has become a hub for private equity firms focused on buyouts in the healthcare sector. Sector specialists like Linden Capital Partners and Cressy and Company are based in the Windy City.
In June of this year, Linden acquired Solara medical supplies for an undisclosed amount with debt financing from Chicago-based TwinBrook Capital Partners and Monroe Capital along with New York-based Solar Capital. Also, in June, Cressy and Company acquired Elite Dental Partners, a dental support organization with over 80 locations, for an undisclosed amount with Golub Capital supplying debt financing.
Varagon Capital Partners is a mid-market direct lending firm. The firm was founded in 2014 and has made over $9 billion in investment commitments so far.