Newport Beach-based private equity fund Strathspey Crown Holdings LLC is keeping its focus on healthcare even as it plans to get into the financial management arena through a new subsidiary.
The new unit is Crown Sterling, a New York-based investment management and financial services company serving specialty physicians—Strathspey Crown’s core base. Among its offerings is a doctor-focused pension fund.
“Every other professional group has a pension fund in some way, shape or form—police have it, firemen have it [and] teachers in Wyoming have it,” said Robert Grant, Strathspey Crown’s chairman and co-founder, in an interview last week at the Irvine headquarters of Alphaeon Corp. Alphaeon is a Strathspey Crown portfolio company that focuses on “lifestyle healthcare,” which encompasses products and services not paid for by insurance.
“There are 1.3 million specialty doctors around the world and we are intensely focused on serving their needs,” Grant said. “We know that asset management is one of those needs. We were asked by our physicians to provide this as a service to them.”
Crafting an approach specific to doctors is a key to Crown Sterling’s strategy.
“No one has focused on this market segment,” he added, later noting that doctors often give their pensions and 401(k) retirement funds to third-party managers or “it could just be kind of their mother’s brother’s cousin’s uncle.”
Crown Sterling aims to change that.
Strathspey Crown has tapped a pair of Wall Street veterans to run the day-to-day operations of the firm—managing partners Brian Brille and Vikram Malik.
Brille was most recently chairman and president of the Asia Pacific region for Bank of America Merrill Lynch. He earlier was head of global corporate and investment banking for Bank of America and led its acquisition of Merrill Lynch in 2008.
Brille believes “the opportunities in aesthetics/lifestyle healthcare are among the most attractive in healthcare.”
Malik was most recently vice chairman of investment banking and global head of medical technology at Deutsche Bank AG. He also worked with Brille at Bank of America earlier in his career.
Crown Sterling will offer its first retirement fund, which will be by invitation only, in the middle of 2016, Grant said. It will be aimed at specialty doctors with net worth of $2 million to $20 million.
The idea for starting a retirement fund came from a variety of sources, including Strathspey Crown shareholders and doctors’ requests on ShoutMD, a social network that was established by Alphaeon in 2013 and now has some 7,000 users.
“I’d say a lot of the ShoutMD community probably already knows about it because it was through ShoutMD that the doctors requested that we do this,” Grant said, adding that Strathspey has about 650 physician specialty shareholders.
Alphaeon itself was established in 2013 by Strathspey Crown, which was started in 2012.
High-Profile Location
Crown Sterling is at the General Electric Building at 570 Lexington Avenue in Manhattan, a 50-floor, 640-foot-tall skyscraper that overlooks Park Avenue and was built in 1931. The firm’s offices are kitted out in the Art Deco style, a contrast from the airy, red and white offices of Alphaeon near John Wayne Airport in Irvine.
“It’s the only building in New York that’s got a crown on it,” Grant said, noting the tie-in to the new operation’s name.
Crown Sterling has taken various steps to prepare for operation, including working with the Washington, D.C.-based Financial Industry Regulatory Authority Inc.
“We’re not looking to sell them any particular types of equity or sell them any particular types of advisory services at this time,” Grant said. “Once we’re ready to, then we’ll have specific offerings for them that will then be tailored to their needs and tailored to their requirements for both liquidity and long-term returns.”
The firm has even dipped into political advocacy targeted to doctors and their patients.
Strathspey Crown Vice President Ed Reno, a former national director of federal government affairs for Allergan Inc., and Managing Director Scott Baugh, former Orange County Republican Party chairman, are part of that effort.
“The only lobby groups are really pharma companies, payers, insurance providers, and there’s a lot of talk right now about what’s happening with generic medications and prices and all this stuff,” Grant said. “Somebody needs to advocate for doctors and patients.”
Strathspey Crown helped to launch the Aim Act of 2015, a proposed federal law that would amend the Social Security Act “to promote healthcare technology innovation and access to medical devices and services for which patients choose to self-pay under the Medicare program.”
Freshman U.S. Rep. Mimi Walters, R-Irvine, is among the bill’s co-sponsors. Grant mentioned that the act has bipartisan support in both congressional chambers.
