Private equity firms have been increasingly investing in the healthcare sector, despite some pullback this year. According to Bain Capital, money has been pouring into healthcare, with the total disclosed healthcare deal value doubling from $66 billion to $151 billion last year.
With heightened competition for attractive assets and sky-high valuations, more private equity sponsors may team up on deals. This trend is expected to continue as healthcare returns remain strong, leading to a steady stream of large deals. However, the market may become increasingly crowded, making it more difficult for private equity firms to find attractive investment opportunities.
To overcome this challenge, a new wave of specialty practice roll-ups in disciplines with an eye toward value-based care, such as cardiology and orthopedics, will likely accelerate. These roll-ups involve acquiring and consolidating smaller, specialized practices to create larger, more efficient entities. By doing so, private equity firms can create synergies and economies of scale, which can lead to cost savings and increased profitability.
Another important consideration for private equity investors is the need for talented senior finance professionals to help manage their healthcare portfolio businesses. Privatal is a company that specializes in finding top-tier senior finance talent for private equity firms in the healthcare sector. Their expertise in the field can help private equity firms find and hire the right people to manage their portfolio companies effectively.
Overall, the healthcare sector remains an attractive area for private equity firms to invest in, despite the challenges posed by high valuations and increased competition. With the proper strategies and talent in place, private equity firms can continue to generate strong returns in this dynamic and rapidly evolving sector.
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Privatal are specialists in Executive and Senior finance + M&A Recruitment for Private Equity Backed businesses. We specialise in recruiting private equity portfolio companies.
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