A new venture fund has formed to provide start-up and expansion capital to healthcare service companies.
Dauphin Capital Partners, led by co-general partners James Hoover and Debra Diamond, plans to raise $50 million in equity from private investors. The pool will have its closing this summer. Investments will be made in increments ranging from $2.5 million to $7.5 million.
The fund intends to take minority stakes in healthcare companies that build on three themes: consumerism, outsourcing and cost management. Under the consumerism banner, Dauphin will consider investments in businesses such as assisted living, alternative medicine and Medicare+Choice-the government's program for expanding managed care for Medicare beneficiaries.
Hoover, who is leaving New York-based Welsh, Carson, Anderson & Stowe to pursue the new venture, says about $20 million has been committed by individuals in the healthcare business. They include chief executive officers, physicians, consultants and attorneys, who will be available to assist companies in which Dauphin invests.
The venture fund will operate out of offices in Baltimore and Locust Valley, N.Y.
"Without the doors even being open, we're receiving a lot of business plans and calls," Hoover says.