Firm Description
HEP is a private equity firm founded in 2006 that invests primarily in middle market, private, U.S.-
based companies in the healthcare information technology and healthcare service sectors. Rick Stowe
is a founding member of the Firm. Dave Tamburri andEzra Mehlman joined HEP in 2009 and2010,
respectively. Dave andEzra each serves as Managing Partner and, along with Rick, are the Firm’s
principal owners.
The Firm targets companies that provide innovative technologies and services primarily to hospital
systems or health plans. HEP’s Funds invest in growth equity, recapitalization and buyout
opportunities where it is typically all or part of the first institutional investor group and has control or
significant governance influence. HEP leverages its extensive hospital system and health plan network
of relationships to target attractive market segments, to identify and evaluate investment opportunities,
and to support the growth of HEP’s portfolio companies. (See Item 8 for a more detailed discussion
of HEP’s investment strategy.)
HEP currently manages four funds (collectively referred to herein as the “Funds”): Health Enterprise
Partners, L.P. (“Fund I”), Health Enterprise Partners II, L.P. (“Fund II”), Health Enterprise Partners
III, L.P. (“Fund III”) and Health Enterprise Partners IV, L.P. (“Fund IV”).
The Funds generally invest through negotiated transactions in operating companies. HEP’s
investment advisory services to the Funds consist of identifying and evaluating investment
opportunities; structuring and negotiating the terms of investments and consummating investments
on behalf of the Funds; managing and monitoring investments; and ultimately selling such
investments. Investments are made in non-public companies. Upon investing in such companies,
senior principals of the Firm generally serve on the respective boards of directors or otherwise act to
influence control over management of portfolio companies held by the Funds.
HEP provides investment advice directly to the HEP Funds and not to investors in the Funds
individually. The applicable GP (as defined below) of each Fund retains investment discretion, and
investors in the Funds do not participate in the control or management of the Funds. The Firm’s
advisory services for each Fund are detailed in the applicable offering memorandum and limited
partnership agreements and are further described below under “Item 8 - Methods of Analysis,
Investment Strategies and Risk of Loss.” Investors in the Funds participate in the overall investment
program for the applicable Fund but
may be excused from a particular investment due to legal,
regulatory or other applicable constraints. Investment restrictions for the Funds, if any, are generally
established in the organizational documents of the applicable Fund. The Funds or the Firm have
entered into and may enter into again in the future side letters or similar agreements with certain
investors that have the effect of establishing rights under, or altering or supplementing, a Fund’s
limited partnership agreement.
As of December 31, 2022, HEP had regulatory assets under management of $420,483,772 (portfolio
value plus undrawn commitments), all of which are managed on a discretionary basis in HEP’s sole
discretion.
Principal Owners/Ownership Structure
The Funds are structured as follows. Fund I is owned 1% by its general partner, HEP Associates, LLC
(the “Fund I GP”), with the remaining interests divided pro rata amongst Fund I’s limited partners
according to each investor’s capital commitment. Fund I limited partners no longer pay management
fees to HEP to advise Fund I in its decision-making. The Fund I GP is owned by Managing Members
and Special Members.
Fund II is structured similarly to its predecessor fund. Fund II is owned 1% by its general partner,
HEP Associates II, LLC (the “Fund II GP”), with the remaining interests divided pro rata amongst
Fund II’s limited partners according to each investor’s capital commitment. Fund II limited partners
pay management fees to HEP to advise Fund II in its decision-making. The Fund II GP is owned by
Managing Members and Special Members.
Likewise, Fund III is owned 1% by its general partner, HEP Associates III, LLC (the “Fund III GP”
and together with the Fund I and II GPs, the “GPs”), with the remaining interests divided pro rata
amongst Fund III’s limited partners according to each investor’s capital commitment. Fund III limited
partners pay management fees to HEP to advise Fund III in its decision-making. The Fund III GP
is owned by Managing Members, Special Members and Venture Members.
Fund IV is owned 1.5% by its general partner, HEP Associates IV, LLC (the “Fund IV GP”), with
the remaining interests divided pro rata amongst Fund IV’s limited partners according to each
investor’s capital commitment. Fund IV GP has also committed additional capital as an affiliated
limited partner. Fund IV limited partners pay management fees to HEP to advise Fund IV in its
decision-making. The Fund IV GP is owned by Managing Members, Special Members and Venture
Members.
For more information about HEP’s owners and executive officers, see HEP’s Form ADV Part 1,
Schedule A.