Personal fairness exercise within the international healthcare sector set a brand new file final yr with an estimated $191 billion in deal worth, in keeping with new knowledge from Bain & Firm.
Healthcare stays one in every of PE’s best-performing sectors, pushed each by its scale and sturdy demand from growing older demographics, famous Nirad Jain, senior accomplice at Bain & Firm.
“Healthcare is infrastructure. Within the U.S., it’s like 20% of the economic system. Healthcare demand is ever-growing due to immutable tendencies round demographics and underlying well being,” he remarked.
PE traders have traditionally under-allocated their capital to healthcare, and corporations have been catching as much as what Jain referred to as a “justifiable share” of funding relative to healthcare’s financial footprint. Healthcare has additionally underinvested in know-how for many years, creating alternative for PE to modernize healthcare organizations’ operations and infrastructure, he added.
The segments that noticed essentially the most PE deal exercise in 2025 had been pharma and suppliers. PE exercise is ramping up within the pharma companies ecosystem, Jain identified. He famous that enticing targets embrace companies for packaging, filling and sterilization, particularly for injectable medicine like GLP-1s, in addition to medical trial websites, knowledge assortment corporations and analytics corporations.
As for the supplier phase, PE traders are zeroing in on know-how that may allow higher frontline care, equivalent to workflow automation instruments and diagnostic know-how, Jain declared. He stated three forces are driving this curiosity: extreme underinvestment in healthcare IT up to now, labor shortages coupled with wage inflation, and the macroeconomic want for higher effectivity and price management.
PE corporations are particularly desirous about backing instruments geared toward bettering supplier productiveness or lowering organizations’ reliance on scarce labor swimming pools, equivalent to radiologists or nurses, Jain said.
He added that competitors for healthcare belongings like these is intensifying as extra non-public fairness traders pile into the sector.
“Fifteen years in the past, there have been 175 distinctive non-public fairness corporations that had been doing healthcare offers, and final yr, that quantity was 350,” Jain stated.
This places extra stress on pricing and deal phrases. Because of this, he defined that conventional buyouts are more and more competing with offers between non-public fairness corporations, company spinoffs and take-private transactions.
On the identical time, the stress to generate profitable exits has gone up as portfolios age and corporations sit on file ranges of dry powder.
Jain stated the mix of heightened competitors, growing older portfolios and mounting exit stress is reshaping how PE corporations are approaching healthcare offers. Whereas demand for high-quality belongings stays sturdy, he famous that weaker or underperforming corporations will finally must be reckoned with.
Even so, Jain stated healthcare’s observe file as a dependable supply of returns will proceed to make it a high precedence for PE traders in 2026.
Picture: Andriy Onufriyenko, Getty Pictures
