The McGuireWoods Healthcare Private Equity and Finance Conference — held this year on May 14-15, 2025 — brings together leading investors, operators and advisers to explore trends shaping the healthcare dealmaking landscape. With a focus on actionable insights and relationship building, the conference serves as a forum for stakeholders navigating the intersection of healthcare and private equity.
This article series spotlights key sectors and themes influencing investment strategies and operational priorities across the healthcare continuum. Continuing on from Part 1, this installment focuses on the state of the market and what market conditions signal for the near-term future of healthcare private equity investing, offering a snapshot of what industry leaders are watching most closely. Read on for more insights.
- Current Headwinds Lead to Creative Structuring Solutions. Industry leaders acknowledged that well-known market challenges have tempered the pace of healthcare transactions. Notwithstanding, investors look to current opportunities with a cautious yet optimistic mindset, believing that those who “have the courage to change” will reap the benefits. The economic and regulatory landscapes prompt investors and operators to adopt creative structuring solutions to get transactions across the finish line. High interest rates, tighter credit markets and increased regulatory scrutiny led to more conservative capital structures. As a result, the healthcare private equity landscape relies more on increased seller rollover, longer investment timelines, and deal terms that reflect a cautious and collaborative approach between sellers and investors. While investors maintain that healthcare private equity fundamentals will continue to attract capital and create opportunities, market demand favors those who invest carefully, creatively and in a disciplined manner.
- A Broadening Investment Focus. The healthcare private equity deal landscape continues to evolve, with investors pursuing a broader mix of deal types. Investors are expanding their focus to include scalable investments that avoid direct reimbursement pressures, including healthtech, IT infrastructure, staffing, consumer empowerment tools, pharma services and adjacent healthcare verticals. Notwithstanding reimbursement pressures, some investors explored how “risky” investment areas, such as sectors with high Medicaid reimbursement, could create efficiency and access-to-care opportunities. This diversification reflects a strategic shift as investors seek to balance regulatory exposure, scaling struggles and shifting reimbursement dynamics. Distressed deals are more prominent as capital constraints and market conditions create entry points for opportunistic investors looking to reposition underperforming assets, with at least one conference panelist reflecting that “negative EBITDA is better than low EBITDA.” To succeed in today’s market, investors emphasized that organizations must be agile and open to creative and potentially contrarian opportunities while remaining selective.
- Building Quality and Sustainable Long-Term Growth. Investors are rethinking their consolidation strategies, prioritizing assets with strong management teams, operational strength and clear growth trajectories, especially as broken deals from years past come back to the market. Investors encouraged rigorous business and operational diligence efforts and long-term strategic planning at the outset, noting that poorly integrated acquisitions lead to inefficiencies, cultural misalignment and operational hurdles, which negatively impact investment returns. Successful exits leveraged strategic partnerships and provider alignment while focusing on improved quality and access to care. Panelists also cited compliance efforts to ensure platforms are grade A assets in this market. Investors ensure management teams have clear strategies and effective decision-making capabilities through increased access to advisers, innovation and health tech, including AI. By focusing on quality and long-term alignment at the onset, investors will strategically position themselves for a successful exit.
- Expansive Exits on the Horizon. Looking ahead, industry experts expect the healthcare private equity market to ride the wave of platforms posed for impending exits. Many sponsors held assets longer than originally planned due to market headwinds, but as valuation expectations stabilize and markets reopen, the backlog of mature platforms is poised to reshape the market. Experts expect to see an uptick in exits over the next 12 to 18 months. These larger transactions will test current valuations and set the tone for the next cycle of investment and consolidation. For the market at large, the next round of sales could signal a potential “return to scale,” with buyers competing for mature, well-positioned platforms, particularly those in sectors with demonstrated resilience.
- Labor Shortages No Longer a Deal Breaker. Labor shortages, once a significant headwind for healthcare private equity-backed platforms, have become less of a constraining factor in today’s investment landscape. Over the past several years, organizations adapted with more resilient staffing models, improved retention strategies and added technology-driven efficiencies to reduce dependence on high-cost labor. At the management level, a growing bench of experienced executives, many of whom have successfully navigated staffing crises, provides greater confidence in leadership stability and execution. While competition for skilled workers remains, wage pressures have tempered, and innovative workforce solutions such as float pools, telehealth integration and automation help providers maintain margins and scale operations. These developments helped mitigate prior concerns, allowing investors to refocus on growth, consolidation opportunities and long-term value creation.
As the healthcare private equity space continues to evolve, investors and operators must stay agile. This year’s conference underscored that, despite economic and regulatory challenges, rewarding opportunities exist for disciplined, creative and patient-centered investors in their strategic approach. McGuireWoods monitors these developments and advises clients on how best to navigate the changing landscape.
The next installment of this series will explore key trends in the lending market and what they mean for healthcare private equity transactions.
Thanks to everyone who attended, shared insights and participated in this year’s conference. McGuireWoods looks forward to continuing this dialogue and hopes to see everyone at upcoming events, including the following. For more information on registration, contact [email protected].
- Bloom and Build – Chicago, IL, Tuesday, June 18, 2025
- Join McGuireWoods’ women in private equity, finance and healthcare for a flower-arranging workshop and networking event.
- Healthcare Growth & Operations Conference – Charlotte, NC, Sept. 16-17, 2025
- Independent Sponsor Conference – Dallas, TX, Oct. 14-15, 2025
- Healthcare Private Equity Pop-Up – Denver, CO, more information coming soon
- 22nd Annual Healthcare Private Equity and Finance Conference, April 29-30, 2026
Articles in this series can be found on the conference website under the “Key Takeaways” section.