US investment bank Merrill Lynch has abandoned the fund-raising of its $1bn private equity healthcare fund a year after its launch, despite securing capital commitments from a number of key institutions.
The halt in fund-raising is due to ‘strategic redirection’ at the firm, according to PrivateEquityCentral.net
It launched the healthcare fund a year ago in an attempt to re-enter the third party fund arena, after several years of investing only its own capital. The move throws the future of Merrill Lynch’s private equity operations into doubt.
The report said Merrill was not suffering from a lack of institutional interest and had secured backing from a number of high-profile investors, including Liberty Partners, Pennsylvania Public Schools’ Retirement System and Merrill Lynch, which had committed $400m.
A number of private equity players have been slashing the size of their funds in the current climate, but it is unusual for a fund of this size to be completely abandoned when in fund-raising mode, with key investors on board.
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