Latticework Capital Management, a Dallas-based growth-oriented private equity firm focused exclusively on making control equity investments in the healthcare industry, closed LCM Healthcare Fund II in early May, exceeding the $275 million target with total commitments of $345 million.

Latticework said its second fund added a diverse group of global investors, including leading endowments, family offices, and fund of funds (a pooled fund that invests in other funds, usually hedge funds or mutual funds).

The firm, founded in 2015, has raised $465.9 million across two funds. In 2019, its debut fund raised more than $120 million.

The firm’s co-founders, Kyle Bradford and Steve Neumann, have extensive experience in healthcare private equity and emphasize the importance of partnerships with founders and entrepreneurs.

Bradford, a managing partner of Latticework, said the firm looks forward to building off the success of its previous funds and is grateful for the support of its new and returning limited partners.

“This is an important milestone for the firm, particularly given the ongoing challenges of the fundraising environment, and we are excited to continue leveraging our expertise and experience to take advantage of the tremendous opportunities in lower middle-market healthcare,” he said in a statement.

Latticework said that, consistent with its predecessor funds, Fund II will target control investments in lower middle-market healthcare companies that are founder-led and seeking a partner to accelerate growth.

Adding value to growing companies

The firm said it focuses on opportunities in subsectors where it can create value through organic growth initiatives and profitable add-on acquisitions, driving value to customers and the overall healthcare ecosystem.

Co-founder and managing partner Neumann said the contributions of the firm’s partners, strategic advisors, and the Latticework team “remain a critical part of ensuring our collective success.”

LCM has “a demonstrated track record of building partnerships with founders and entrepreneurs to grow their businesses both organically and strategically while ensuring we remain aligned with our value creation plans,” he added.

To date, Latticework said it has more than $550 million in assets under management. Over the past nine years, LCM has completed 11 platform transactions, 120 add-on acquisitions, and more than 130 transactions to support the portfolio’s growth.

New York City-based Acalyx Advisors Inc. served as exclusive placement advisor. Hogan Lovells US LLP served as legal counsel to Latticework.

Headquartered at Crescent Court in Dallas, LCM said it leverages its more than 100 combined years of healthcare and investing experience, as well as its network of industry executives, to help companies scale and realize their full long-term value. The firm seeks to invest in companies operating in healthcare, pharmaceutical services, medical components, and equipment manufacturing sectors.

Elixa acquired by portfolio company

Earlier this month, American Clinical Research Services (ACRS), a leader in complex clinical research formed by Latticework Capital Management in 2022, announced the successful acquisition of Elixia, a multi-specialty clinical research network with operations in Florida, Massachusetts, Michigan, and Missouri. Elixia specializes in tackling clinical challenges in nephrology, neuroscience, and infectious diseases, with a focus at its 40-bed Phase I unit in Tampa, Florida, on renal and hepatically impaired patients.

LCM’s portfolio includes a range of companies across healthcare sectors from business services to providers to pharmaceutical services. Notable examples include American Veterinary Group, an acquirer and operator of animal hospitals in the Southeastern United States; Athenix, a network of plastic surgery centers; and Salt Dental Partners, which operates pediatric dental and orthodontic practices. Additionally, Beacon Behavioral Partners provides mental health treatment services, while Healthcare Building Solutions offers comprehensive project management and facility activation services.

The PE firm’s prior investments include several prominent companies across the healthcare and medical sectors. Notable examples include ATI Physical Therapy, a comprehensive orthopedic rehabilitation provider; Cambridge Major Laboratories / AAI Pharma, a leading pharmaceutical contract development and manufacturing organization; and Liberty Dialysis, a company providing dialysis services to patients with end-stage renal disease.

Quincy Preston contributed to this report. 

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