Deerfield’s Private Designs

How will health care investor Deerfield Management invest its $1.6 billion Private Design Fund III that closed in April? Any way it wants. Despite the implications of the fund name, the firm plans to use the fund to invest in public and private health care companies.

If history is any guide, about half of the new fund will go into each segment. That would put the private portion of the fund at roughly $800 million, only...