Conference Recap: Healthcare Market Trends and Investor Dynamics

HPE Miami brought together investors and industry leaders to dive deep into the most pressing topics in healthcare and private equity. Over the course of this two-day event, we explored the impact of deal flow, regulatory changes, and innovation on talent within the healthcare industry. Below is a recap of our key takeaways. 

1. Deal Flow and the Executive Talent Pool

Given current market dynamics, investors expressed uneasiness around the impact that long holding periods are having on the availability of executive leadership.  

“Long holding periods complicate the pursuit of top talent. Leaders in the middle of an investment cycle can often be difficult to recruit, restrained by loyalty to the business and team as well as the financial benefits of reaching a transaction. However, an extended holding period can also mean that top talent has been waiting for an event that keeps getting pushed back. If the event horizon continues to extend or has a timeline that is unclear, leaders within those businesses may begin to warm to the idea that better opportunities exist elsewhere. Now may be the time to find a great leader willing to trade out their current business for a more compelling situation and perhaps a more well-defined transaction timeline.” – Pam Zients, Partner  

2. Innovation to Create Differentiation & Returns 

With the amount of capital pursuing similar healthcare investment strategies, PE firms are investing in the development of differentiated and innovative theses. As a result, healthcare investors are exploring subsectors and market approaches that may be less traditional but will enable success.  

“Finding industry operators to work with investment teams in the formulation and refinement of thesis development at their infancy is becoming increasingly common. These pre-deal advisors are creating differentiated value for investors as they identify innovative target investments and conduct due diligence in untapped sectors.” – Chuck Egoville, Managing Partner 

3. Operating Within the Lens of Regulatory & Public Scrutiny 

Unsurprisingly, regulatory changes are shaping how healthcare investors think about new and existing investments. With shifting policies around privacy, compliance, patient access and reimbursement rates, healthcare investors and operators need to build high-performing businesses while understanding how that business might be judged in the court of public opinion.  

“The healthcare industry remains under the magnifying glass for regulatory bodies, and the public overall. Investors need to be conscientious about today’s negative perception of private equity in healthcare, and able to demonstrate the value they create for patients, families and communities – not just their shareholders.” – Andrew Henry, Managing Partner 

Despite some uncertainty around the new administration’s regulatory posture, themes from the conference underscored the continued opportunities within healthcare private equity. Adaptability and a keen understanding of regulatory factors and operational realities will be essential for acquiring and operating businesses within a competitive and scrutinized landscape. Now more than ever, investors and executive teams who exploit the subject matter expertise of experienced healthcare operators will be best positioned to maximize value creation.