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ICG Enterprise identified Tailwind as an attractive investment partner for its US investment programme. It has a strong market reputation, an experienced team and focuses on sectors which have strong defensive growth characteristics. ICG Enterprise committed $15 million to Tailwind III in June 2018 and co-invested $6 million alongside the fund in Abode Healthcare in July 2018.
Abode was sold to Summit Partners in August 2019. The sale occurred significantly earlier than planned - it was identified as a strategically important ‘must-have’ platform in the space and therefore able to command a premium valuation. The sale generated a return of 2.0x cost representing a gross IRR of 69%.
Tailwind Capital is a US private equity firm, which invests in growth-oriented, middle market companies. It invests in targeted sectors within healthcare, business services and industrial services. Its core focus in on companies with enterprise values up to $300 million. It completed fundraising for Tailwind III in September 2018, raising $1.75 billion, which was ahead of its target. At the final close, the fund was c. 15% invested
Having committed to the fund, ICG Enterprise was offered the opportunity to co-invest in Abode Healthcare, which provides hospice and home-care services in the United States. Demand is supported by strong demographic trends: the number of over 65’s in the US population is expected to grow by 44% over the next 20 years. Hospice care offers significant cost benefits over hospitalisation, but is also increasingly the preferred choice of patients.
Situations such as this fit well with our strategy, allowing us to deploy capital in high-conviction investment opportunities whilst growing our primary investment programme in the US. We believe that Abode is a good example of a defensive growth asset which is not sensitive to the economic cycle.