We partnered with the Nexus management team, led by Andrew Petering, and a cohort of doctor shareholders in 2016 to acquire Wolseley Private Equity’s shareholding in Nexus (which comprised of three hospitals plus a further three in due diligence), while simultaneously investing additional capital for Nexus to acquire another participant Mercury had identified - National Day Surgeries (three hospitals) - to create a day-one platform of nine day hospitals across Australia's east coast.

At the time of our investment, Nexus was a relatively newly corporatised operator in a fragmented, yet professionalising sector. We had identified the day hospital sector as exhibiting strong tailwinds, as doctors, patients and private health insurers mostly favoured day hospitals over higher-cost overnight facilities for procedures that can safely be performed outside an acute hospital environment. We saw an opportunity to build only the second national platform of scale by acquiring leading independent hospitals through a distinctive doctor partnership model. Primary surgical practice areas included ophthalmic, orthopaedic, gastro, pain, oral, plastic/reconstructive and dermatology.

Working closely with Andrew and the leadership team, we helped institutionalise the business - recruiting a new CFO and COO, deploying a group-wide enterprise systems and real-time business intelligence platform, establishing an industry-leading clinical governance framework, reframing insurer relationships as strategic partnerships, and extending a unique "tagged" doctor-equity model that aligned ~70 surgeon shareholders to the performance of their own hospitals. Nexus also performed Australia's first day-only knee replacement and pioneered the country's first "Zero Out Of Pocket" surgery funding model with Medibank.

Through this partnership, Nexus grew from three hospitals and eight theatres to fifteen hospitals and fifty theatres, expanding from an east-coast business into a national operator across six states. Revenue grew from $51 million to ~$100 million, EBITDA from $8.5 million to $22 million, and employee numbers from around 250 to more than 700.

In 2019, we led a successful sale process resulting in the acquisition of Nexus by QIC and delivering an outstanding outcome for all shareholders.