Healthcare Investing for the Post-COVID Era

Longfellow Healthcare Partners

Longfellow is a healthcare-focused lower middle market investment firm.  We have a proven track record of helping innovative companies navigate a complex healthcare environment.

Longfellow believes that the COVID pandemic has fundamentally accelerated healthcare’s future and unleashed a wave of change. 
Within this new landscape, we invest in teams and companies positioned to win.

Long-Term Orientation:

Unlike other private equity firms, we take a long-term approach to building companies. 

We are not interested in the quick flip; we are not focused on raising the next fund.  We want to build value over a long period of time. 

Longfellow’s philosophy and structure have been informed by the wisdom of Warren Buffet and Charlie Munger. Our vision is to create a healthcare-focused mini-Berkshire Hathaway. Our circle of competence is healthcare, and our focus is creating long-term value.

 

Investment Criteria:

 
 

We back founders and management teams operating within healthcare’s lower middle market.  We don’t invest in start-ups, and we don’t invest in sclerotic, entrenched players. 

Our companies have proven business models and a track record of success. And we help founders and managers take their businesses to the next level.

  • Transaction Size

    $25-$75M equity per investment platform

  • Company Stage

    Revenue-generating ($10M+) and a proven, profitable business

  • Company Growth Profile

    Growing at 5x GDP or more (10-15%+ growth)

  • Transaction Type

    Majority ownership, with very selective minority positions

 

Healthcare Sectors of Interest:

The COVID pandemic accelerated the future of healthcare and unleashed a wave of change. Some traditional businesses will struggle dealing with these changes. 

Longfellow invests in healthcare companies that are poised to win in the new post-COVID environment.   

 

➔ Longfellow invests in healthcare sub-sectors positioned to win

  • Next-gen managed care: Capitated and value-based care; home and community-based care; tech-enabled primary care; software and analytics that measure healthcare value and efficiency

  • Pharma and medtech services: Specialized capabilities that support next-gen therapies; remote clinical trials; software and advanced analytics; contract manufacturing with local footprints

  • Digital healthcare: Telehealth and virtual care that enable healthcare delivery at less intensive settings; e-pharmacy; at-home diagnostics and tools used by consumers to manage and monitor their health

  • Consumer-driven care: Patient-centered models for hard-to-treat diseases like in behavioral health; tools for consumers to manage and monitor their own health; quality and price transparency tools

  • Next-gen diagnostics: Specialized tools and diagnostics; application of AI for next-gen therapies; companion diagnostics; home-based monitoring

➔ “Average” healthcare sub-sector will perform fine

  • Traditional pharma (with exceptions)

  • Basic medical equipment and consumables

  • Traditional critical / emergent care and traditional chronic care

➔ Certain healthcare sub-sectors are likely to struggle

  • Facility-based, asset-intensive healthcare delivery models (e.g., hospitals, nursing homes, etc.)

  • Practice management groups that create limited efficiencies and misaligned incentives

  • Expensive / speculative technology with limited clinical value and subject to price pressure

  • Businesses dependent upon old, inefficient payment models like out-of-network billing