Top Healthcare Private Equity Firms - list of healthcare Private Equity Firms

List of Healthcare Private Equity Firms: Top Companies to Know in 2023

Private equity firms have been increasingly investing in the healthcare sector in recent years.

These firms provide capital to healthcare companies in exchange for ownership stakes, with the aim of generating returns for their investors.

The healthcare industry is attractive to private equity firms due to its size, growth potential, and the increasing demand for healthcare services.

Healthcare private equity firms invest in a variety of healthcare sectors, including pharmaceuticals, medical devices, healthcare services, and healthcare technology. Some of the top private equity firms in healthcare include Bain Capital, KKR, and Blackstone.

These firms have invested billions of dollars in healthcare companies, with a focus on companies that have strong growth potential and a competitive advantage in their respective markets.

Key Takeaways

• Private equity firms are increasingly investing in the healthcare sector due to its size, growth potential, and increasing demand for healthcare services.

• Healthcare private equity firms invest in a variety of healthcare sectors, including pharmaceuticals, medical devices, healthcare services, and healthcare technology.

• Top private equity firms in healthcare include Bain Capital, KKR, and Blackstone, which have invested billions of dollars in healthcare companies with strong growth potential and competitive advantages.

Overview of Healthcare Private Equity Firms

Healthcare private equity firms are investment firms that specialize in investing in healthcare companies and organizations.

These firms provide capital to healthcare businesses, which can help them grow and expand their operations. Healthcare private equity firms typically invest in a wide range of healthcare services, including hospitals, medical devices, pharmaceuticals, and healthcare technology.

Private equity firms are known for their ability to provide significant amounts of capital to healthcare companies.

This capital can be used to fund research and development, expand operations, and acquire other businesses.

Private equity firms are also known for their ability to provide strategic guidance to healthcare companies, helping them to navigate the complex healthcare sector and identify new growth opportunities.

Healthcare private equity firms operate in a highly competitive market. There are many firms that specialize in healthcare investments, and each firm has its own unique investment strategy. Some firms focus on growth-stage investments, while others specialize in buyouts and acquisitions. Some firms invest in early-stage healthcare companies, while others focus on more established businesses.

Despite the challenges of the healthcare sector, healthcare private equity firms have continued to invest in healthcare companies and organizations.

In the first quarter of 2023, there were several high-profile healthcare deals, including the $17 billion buyout of healthtech company Athenahealth by Bain Capital and Hellman & Friedman, as well as Clearlake's rollover of Symplr, a healthcare governance, risk, and compliance company.

Overall, healthcare private equity firms play a critical role in the healthcare sector. They provide capital, strategic guidance, and expertise to healthcare companies, helping them to grow and expand their operations.

As the healthcare sector continues to evolve, healthcare private equity firms will likely play an increasingly important role in driving innovation, growth, and investment in the industry.

Role and Impact of Private Equity in Healthcare

Private equity (PE) firms have increasingly become involved in the healthcare sector, with a focus on consolidating healthcare providers and companies.

While some argue that PE investment brings innovation and growth to the industry, others are concerned about the impact of financial arbitrage and leverage on suppliers, payors, and patients.

PE firms typically invest in healthcare companies at different stages of growth, including early-stage startups, growth-stage companies, and mature businesses.

They often seek to acquire or merge companies to create larger portfolios and drive economies of scale. In some cases, PE firms may also invest in healthcare technology, therapeutics, medical devices, and life sciences.

PE investment in healthcare has grown significantly in recent years, with healthcare-focused funds raising record amounts of capital and making more healthcare deals.

Despite the impact of the COVID-19 pandemic on dealmaking, healthcare investments remained strong, with many PE firms focusing on companies that provide essential healthcare services.

While some argue that PE investment brings much-needed capital and expertise to the industry, others are concerned about the impact of PE ownership on the quality and cost of care.

Research suggests that PE ownership of healthcare services, including hospitals and nursing homes, can lead to higher costs and lower quality of care.

In conclusion, the role and impact of private equity in healthcare remain a topic of debate. While some see it as a way to drive innovation and growth, others are concerned about the impact on patients and the broader healthcare sector.

As the aging population and rising healthcare costs continue to drive demand for healthcare services, it remains to be seen how PE investment will shape the future of the industry.

Key Healthcare Private Equity Firms

Private equity firms have been increasingly active in the healthcare sector in recent years, with many firms seeing the potential for growth and innovation in the industry.

Here are some of the key healthcare private equity firms to watch:

TPG Capital

TPG Capital is a private equity firm with a dedicated healthcare investment platform. The firm has invested in a wide range of healthcare companies, including pharmaceutical services, medical devices, and therapeutics.

TPG Capital is known for its growth-stage investments and co-investments with other firms.

KKR

KKR is a global investment firm that has been active in the healthcare sector for many years. The firm has a dedicated healthcare team that focuses on investments in healthcare services, pharmaceuticals, and medical devices.

KKR is known for its large buyout deals and has been involved in some of the biggest healthcare transactions in recent years.

Great Hill Partners

Great Hill Partners is a Boston-based private equity firm that specializes in growth-stage investments in healthcare technology and services. The firm has a strong track record of investing in innovative companies in the healthcare sector, such as RxSense and RxBenefits.

EQT

EQT is a global investment firm that has a dedicated healthcare team.

The firm's healthcare investments focus on companies that are driving innovation and growth in the sector, such as Curaeos and Certara. EQT is known for its long-term investment approach and has a strong track record of partnering with management teams to drive growth.

HarbourVest Partners

HarbourVest Partners is a global private equity firm that has been active in the healthcare sector for many years.

The firm's healthcare investments focus on companies that are driving innovation in the industry, such as EUSA Pharma and ERT. HarbourVest Partners is known for its expertise in secondary investments and has been involved in many healthcare transactions.

Hellman & Friedman

Hellman & Friedman is a private equity firm that has been active in the healthcare sector for many years. The firm's healthcare investments focus on companies that are driving innovation and growth in the sector, such as MultiPlan and Envision Healthcare. Hellman & Friedman is known for its large buyout deals and has been involved in many of the biggest healthcare transactions in recent years.

These are just a few of the many private equity firms that are active in the healthcare sector. With the aging population and increasing demand for healthcare services, the industry is likely to continue to attract investment and drive innovation in the coming years.

Investment Trends in Healthcare Private Equity

Private equity investment in healthcare has grown significantly over the last decade, with estimated annual deal values increasing from $41.5 billion in 2010 to $119.9 billion in 2019, for a total of approximately $750 billion over the last decade 1.

Despite the COVID-19 pandemic, the healthcare private equity sector has remained active, with many investors looking for opportunities to invest in growth-stage healthcare companies.

In terms of healthcare investments, investors have shown a preference for pharmaceutical services, medical devices, and therapeutics 2.

The aging population in the US has also created a significant opportunity for investors to invest in healthcare companies that cater to this demographic. Additionally, there has been a surge in healthcare technology investments, with many investors looking to capitalize on the increasing demand for innovative healthcare solutions.

Recent research suggests that private equity firms are increasingly focusing on co-investments, with many firms partnering with other investors to acquire healthcare companies 3.

This trend has been driven by the need for larger investment sizes and the desire to spread risk across multiple investors.

Furthermore, there has been a rise in healthcare-focused funds, with firms raising more than $15 billion in new buyout capital for funds where healthcare is the exclusive or core focus in 2022 4. This has happened in only two other years in the last two decades, indicating a significant interest in healthcare investments.

The first quarter of 2023 has seen several high-profile healthcare deals, including EQT's acquisition of Great Hill Partners' portfolio company RxBenefits, and KKR's purchase of a majority stake in Texas-based healthcare enterprise value company 5.

These transactions indicate that private equity investors remain interested in healthcare deals despite the ongoing pandemic.

In conclusion, the healthcare private equity sector remains active, with investors looking to capitalize on the opportunities presented by the aging population, innovative healthcare technology, and the increasing demand for healthcare solutions.

Private equity firms are increasingly focusing on co-investments and healthcare-focused funds, indicating a significant interest in healthcare investments.

Footnotes

1. Private Equity I Healthcare Report - UC Berkeley School of Public Health ↩

2. Who are the most active PE investors in healthcare? | PitchBook ↩

3. Healthcare Private Equity Outlook: 2022 and Beyond | Bain & Company ↩

4. Healthcare Private Equity Outlook: 2023 and Beyond | Bain & Company ↩

5. Private Equity Firms Continue to Invest in Healthcare Despite Pandemic | Chicago Booth Review ↩

Conclusion

In conclusion, private equity firms have become increasingly interested in the healthcare industry in recent years. As healthcare costs continue to rise and the demand for healthcare services increases, private equity firms see an opportunity to invest in a growing market.

The healthcare private equity market has seen significant activity in recent years, with high-profile deals and record levels of investment.

Some of the most active private equity firms in healthcare include Bain Capital, KKR, and Blackstone.

These firms have made significant investments in healthcare companies across a range of sectors, including pharmaceuticals, medical devices, and healthcare services.

While private equity investment in healthcare can provide much-needed capital for companies and help to improve the quality of care for patients, there are also concerns about the impact of private equity on the healthcare industry.

Some studies have found that private equity ownership is correlated with worse health outcomes and higher prices.

It is important for investors and policymakers to consider the potential benefits and risks of private equity investment in healthcare.

By promoting transparency and accountability in private equity investments, it may be possible to ensure that private equity firms are contributing to the growth and development of the healthcare industry in a responsible and sustainable way.

Frequently Asked Questions

What are some notable healthcare private equity firms?

Some notable healthcare private equity firms include Apax Partners, Blackstone Group, Carlyle Group, and KKR & Co. These firms have invested in various healthcare sectors, including pharmaceuticals, medical devices, and healthcare services.

Who are the major investors in healthcare private equity funds?

Major investors in healthcare private equity funds include pension funds, endowments, and foundations. These investors are attracted to the potential for high returns in the healthcare sector.

What is the difference between growth equity investors and small PE firms?

Growth equity investors typically invest in companies that have already established a solid foundation and are looking to expand. Small private equity firms, on the other hand, invest in smaller companies that are often in the early stages of development.

What are some life sciences private equity firms?

Some life sciences private equity firms include OrbiMed Advisors, Abingworth, and Vivo Capital. These firms specialize in investing in biotechnology and pharmaceutical companies.

What are some multi-site healthcare private equity firms?

Multi-site healthcare private equity firms include Audax Private Equity, Linden Capital Partners, and Welsh, Carson, Anderson & Stowe. These firms invest in healthcare companies that operate across multiple locations and have a broad range of services.

Who is the largest private equity company?

The largest private equity company is currently Blackstone Group, with over $649 billion in assets under management as of 2021. The firm has invested in a wide range of industries, including healthcare.

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