NEW YORK – Jeffrey Krauss, a former general partner at Nazem & Co., joined Psilos Group Managers LLC in mid-April, as part of the firm’s expansion, and in advance of the launch of its second fund, said Albert Waxman, the firm’s managing member and co-founder.
“We are trying to build a substantial organization here, and we felt the need to add a partner. I knew Jeff from working with him at the New York City Investment Fund and asked him if he would like to join us,” Waxman said. The New York City Investment Fund was created in 1996 by Kohlberg Kravis Roberts & Co. co-founder Henry Kravis, as a social investment vehicle with the goal of creating new businesses and jobs in New York City. Waxman volunteers as a director of the fund’s health-care sector group, of which Krauss is a member.
Waxman declined to say exactly when Psilos, which backs early-stage health-care, digital media and e-commerce/Internet companies, would begin fund raising for the new vehicle, beyond saying the launch was close. The new fund will have a target of two-and-a-half to three times the size of the firm’s $102 million freshman effort, Psilos I, which closed in the fall of 1998, Waxman said. That vehicle is almost fully committed.
Krauss said his responsibilities will be the standard set of tasks for a partner at a venture capital firm. “I will be doing the whole shebang – sourcing, investing, monitoring existing deals and sitting on boards,” he said. Krauss said he would spend the majority of his time working on health-care deals, with a focus on e-health companies. He will also do some deals in the digital media space and look for opportunities in other industries with characteristics similar to the health-care industry.
“Health-care is a very fragmented industry, and we may find some Internet-related opportunities in other industries where we can transfer our knowledge and do good deals,” he explained. He identified insurance as a possible candidate for deals, because it is a highly-fragmented market.
Krauss worked at Nazem & Co. for 10 years, where he focused on technology-based investments in the health-care and media industries. “After 10 years at Nazem, I felt like it was time for something new. I believe Psilos gives me a good platform to continue to do what I had been working on, while also providing me the opportunity to influence the growth of the firm – that was exciting to me,” Krauss said.
Psilos’ investment team currently consists of eight professionals: Managing Members Stephen Krupa, Krauss and Waxman, Managing Directors Samuel Bain, Lisa Suennen and Mark Pearl, and Principals Joseph Riley and David Eichler. Waxman said he believes the staff is now big enough to handle the firm’s second fund without any additional hires.