Concord Health Partners Looks to Behavioral Health After Closing $150 Million Fund

Concord Health Partners Looks to Behavioral Health After Closing $150 Million Fund

The behavioral health market may see another active investor bring private equity into the space.

Concord Health Partners of Summit, New Jersey, announced the final closing of a $150 million fund focused on growth-stage companies that either have innovative technologies, improved access to care, improved quality, or lower costs.

The fund is called the Concorde Innovation Fund II, according to a press release.

Concord Health Partners has allocated 50% of the allocated capital to the fund to date. That capital went to several healthcare companies including Austin-based Telepsychiatry, Iris Telehealth and Switzerland-based digital neurotherapy company. MindMazeAccording to the statement.

Seattle-based Concord Health Partners and Columbia Pacific Advisors led the $40 million Series B round for Iris Telehealth. It was announced in April.

Other behavioral health portfolio companies of Concord Health Partners include CBT-based digital tool provider Learn To Live.

The latest release marks a new step in the evolution of Concord Health Partners. The company is exploring additional offerings in the near term in the areas of emerging innovation and behavioral health.

The company hopes to position itself for what may be a wave of behavioral health companies seeking growth stage capital after increasing venture capital flowing into healthcare technology and technology enabling services over the past few years, James Olsen, founder and managing partner at Concord Health Partners Tell Behavioral Health Business.

“Overall, we see a very important set of opportunities,” Olsen said of investing in behavioral health. “We know it’s attractive, given the needs and given our strong alignment with the top providers and pushers in the industry, all of whom focus on innovative technologies and solutions that address behavioral health. It’s a great fit for us.”

Olsen highlighted Iris Telehealth and Learn To Live as examples of the fund’s approach.

“These are really innovative technologies that increase access to quality care, increase use and participation on the front end, and address some of the pain points in behavioral health,” Olsen said. “These are the kinds of things we will focus on. … [There are] Lots of opportunities out there.”

The Concord Innovation Fund II is 300% larger than the company’s inaugural fund, which closed in November 2019. It has more than 50 limited partners (LPs).

LPs participating in the fund include family offices, endowments, and institutional investors as well as taxpayers and healthcare organizations, including the American Hospital Association.

“Concord has rapidly demonstrated its ability to obtain and implement investment opportunities across the continuing care chain,” Rick Pollack, president and CEO of the American Hospital Association, said in the statement.

According to merger and acquisitions advisory firm The Braff Group, dealmaking overall in the behavioral health space is trailing a remarkable year in 2021, with some exceptions for private equity deals.

It tracked 102 behavioral health-related deals during the first half of the year, 20% less than the same period last year. However, the volume of deals in the field of autism treatment is about 15% higher than it was in 2021, according to the company’s data.

“The story is a little different when it comes to behavioral health private equity investing activity,” The Braff Group said in a recent report. “During its decline, sponsored transactions were only delayed by 11.4% in the last year.

“But if we break it down between market entry platform trades versus follow-ups, the data tells us a bit more. While platform volume is down 28.6%, follow-ups are 5.6% less than in 2021.”

Braff Group tracked 251 deals in 2021, a 33% increase from another very good year for deals in 2020.

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