Sheridan Capital Gathers Nearly $1.35 Billion for Two New Healthcare Funds -- WSJ
By Laura Kreutzer Healthcare-focused private-equity firm Sheridan Capital Partners has rounded up nearly $1.35 billion for two new funds, including closing on $245 million for its first vehicle focused solely on healthcare tech investments. "There's a lot of investor interest in the healthcare sector, given the dynamics of growth and more demographics accessing the healthcare markets," said Sheridan Partner Jonathan Lewis, who co-founded the Chicago firm alongside Partner Sean Dempsey. "They're increasingly drawn to sector specialists that have some sort of unique approach and perspective on the middle market." The funds The firm's latest core private-equity pool, Sheridan Capital Partners Fund IV, reached its $1.1 billion upper limit in only around 60 days, according to the firm. The fund's final tally put its size above an $800 million target and nearly doubled the $575 million raised for a predecessor, which the firm closed in 2023. Among investors that backed the latest core fund, the Arkansas Teacher Retirement System committed up to $45 million in July, according to pension documents. However, it took the firm well over a year to reach its $245 million total for its deb
35 billion for two new funds, including closing on $245 million for its first vehicle focused solely on healthcare tech investments. "There's a lot of investor interest in the healthcare sector, given the dynamics of growth and more demographics accessing the healthcare markets," said Sheridan Partner Jonathan Lewis, who co-founded the Chicago firm alongside Partner Sean Dempsey. 1 billion upper limit in only around 60 days, according to the firm. The fund's final tally put its size above an $800 million target and nearly doubled the $575 million raised for a predecessor, which the firm closed in 2023.
Among investors that backed the latest core fund, the Arkansas Teacher Retirement System committed up to $45 million in July, according to pension documents. However, it took the firm well over a year to reach its $245 million total for its debut healthcare information-technology fund, Sheridan Healthcare IT Fund I. Sheridan marketed that fund as advances in artificial intelligence stoked investor anxiety about potential disruption of certain software industry business models. Lewis said the firm received a lot of questions from investors about AI's potential impact on the sector, but that he was pleased with the support the IT fund received.
"Ultimately what we saw is that there is a lot of opportunity within the healthcare sector as well as some defensive moats we believe around AI and the potential to deploy it," he said. The strategies Sheridan plans to invest from both its new funds in founder-owned lower midmarket North American companies within the healthcare sector that can benefit from the firm's specialized operational expertise.
The firm aims to invest from its fourth main fund in healthcare products and services companies with $5 million to $25 million of earnings before interest, tax, depreciation and amortization, Lewis said, while it targets slightly smaller founder-owned healthcare software and technology companies with the Healthcare IT fund. "We're really meeting those founders at a period when they're trying to scale their businesses," he said. Although Sheridan has yet to start investing out of Fund IV, the firm expects to use it to build a portfolio of around a dozen companies, according to Lewis.
The firm has backed eight businesses with its third main fund and has room for one more deal before that pool is fully invested, he added. So far, that fund's holdings include biopharmaceutical industry equipment maker Carolina Components Group and alternative group insurance provider Tres Health. Meanwhile, Lewis said that Sheridan plans to back around six to eight companies with the IT fund.
The firm has already invested from the new vehicle in three platform holdings: Cadara, which provides financial and billing software for post-acute-care facilities; ICANotes, an electronic medical-records company for behavioral healthcare providers; and PtEverywhere, a practice-management software supplier for physical therapy and rehabilitation businesses. The context Sheridan closed its latest fundraising campaigns as private-equity investment in healthcare has moderated from particularly robust levels last year. However, this year's deal flow remains fairly steady by historic levels.
Private-equity deal activity in the healthcare sector hit $51 billion in this year's first half, slightly below the year-ago period, according to an August report from industry consulting firm Bain & Co. Bain said the number of transactions in the first half of 2026, at 184, was slightly higher than the number reached in the first half of 2025. When approaching potential fund investors during its just-ended campaign, Sheridan could point to a few exit deals in the past 18 months to buoy its pitch, Lewis said. Last year, the firm sold Tarrytown Expocare Pharmacy to Carlyle Group and also sold a majority of its stake in DAS Health Ventures to Coalesce Capital.
Sheridan had backed both companies out of its second main fund, which the firm closed in 2021 with $306 million. "We see both private equity-backed strategics and other sponsors coming down-market to find attractive opportunities," Lewis said. "We see it as an advantage. com (END) Dow Jones Newswires October 07, 2026 07:30 ET (11:30 GMT) Copyright (c) 2026 Dow Jones & Company, Inc.
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