IVCA Profile Q&A: Lester B. Knight, Founding Partner and Co-Chairman of RoundTable Healthcare Partners, Recipient of IVCA's 2010 Stanley C. Golder Medal

IVCA Profile Q&A: Lester B. Knight, Founding Partner and Co-Chairman of RoundTable Healthcare Partners, Recipient of IVCA's 2010 Stanley C. Golder Medal

October 27, 2010

CHICAGO - “ Last month, the Illinois Venture Capital Association announced the award recipients for the upcoming IVCA Awards Dinner on December 6th, 2010. The Stanley C. Golder Medal, which acknowledges individuals who have made profound and lasting contributions to the private equity industry in Illinois, will be awarded to Lester B. Knight, Founding Partner and Co-Chairman of RoundTable Healthcare Partners.

In the weeks leading up to the December 6th Awards Dinner, the IVCA will be profiling all the 2010 recipients. We begin with Lester B. Knight regarding his honor.

IVCA: Congratulations on receiving the Stanley C. Golder Medal. How important to you is the IVCA in strengthening the community of venture capital and private equity in the area?

Lester B. Knight: A variety of important discussions regarding financial regulatory reform and tax policy are currently underway that could have meaningful implications to the venture capital and private equity industry. In this environment, it is extremely important for strong advocacy, and IVCA provides this for its members, both in Illinois and on a national level, in coordination with the National Venture Capital Association. IVCA also provides a strong networking and educational platform for the venture capital and private equity community.

IVCA: You recently took the reins as Co-Chairman for RoundTable Healthcare Partners. What new duties do you have in that role and how will it change your vision for the firm?

Knight: RoundTable continues to remain true to our original vision of working in partnership with outstanding middle-market healthcare companies where our operating expertise can help accelerate earning growth and create long-term value. In conjunction with the $600 million equity fund fundraising and the $200 million capital fund fundraising we completed this summer, we have added additional partners to complement and strengthen our team, and continue to support the firm's long-term growth. The firm operates very similarly to when we started nine years ago.

IVCA: With your expertise in the health care industry, what are the most crucial issues in that industry at the current time, post the recent Federal Health Care Legislation?

Knight: I believe the recent healthcare reform legislation will create significant and new complexity throughout the healthcare sector. At the same time, this complexity will afford new opportunities for attractive investments. This is particularly exciting for investors like us with unique industry domain expertise and operating capabilities.

IVCA: What has been the most significant change in the health care industry, from the time you began your career in the 1980s to now?

Knight: The biggest change I have seen in the healthcare industry since the early 1980's relates to changes in medical technology, specifically new drugs and devices. In particular, I would point to new drugs such as statins designed to lower cholesterol, and new medical devices like stents and heart valves that are all focused on heart disease. These technological developments have had some of the most significant impact for many people, in terms of improving both quality of life and life expectancy.

IVCA: How do you view healthcare investment opportunities in Illinois versus other areas of the country?

Knight: We have a great deal of success with healthcare investments in Illinois. A number of our current and prior portfolio companies have operations in this state. Illinois has the benefit of a high concentration of very experienced healthcare executives and workers, and we find that creates a good pool of human and intellectual capital from which to draw.

IVCA: What is your observation about the current state of fundraising - is it as strong as ever or is it in comeback mode from the economic climate of the last couple of years?

Knight: Our experience has been that investors have continued to exhibit strong interest in investing in firms with demonstrated successful track records, unique strategies and operating capabilities, and sustainable competitive advantages. The broader private equity fundraising environment has certainly become more difficult and selective over the past few years, and I expect it will continue that way for the foreseeable future.

IVCA: Finally, what changes do you see in the private equity industry of which everyone needs to be aware? How do you think these changes will affect the overall industry?

Knight: We have observed that it is increasingly important, in our view, to maintain a differentiated strategy and the ability to create real value. This has manifested itself in increased industry specialization, and the need to bring value-added capabilities, such as operating resources, to support investment decisions and operating plan execution. These trends are likely to lead to significant industry consolidation over the next few years.