Chicago has surprisingly deep pockets when it comes to private equity funding in healthcare, reports Crain's Chicago Business.
The healthcare market is uniquely ripe with investment opportunities. The rising number of insured individuals under the Affordable Care Act, in combination with the aging baby boomer generation and consumer demand for convenience and efficiency are driving structural changes in healthcare delivery. This has fueled consolidation through mergers and acquisitions among hospitals and health systems, and driven fragmentation for dermatologists and dentists.
Private equity investment in healthcare continues to grow considerably, and PE firms in Chicago are flourishing.
Below are four things to know about healthcare investment firms in Chicago.
1. Chicago is home to the biggest cluster of private equity firms singularly focused on healthcare in the country. Chicago PE companies have contributed more than $2 billion in investments during the past two years alone, and have been active in the mergers and acquisitions market.
2. PE in Chicago grew out of a confluence of strong finance pioneers, such as First Chicago Bank.
3. Some of Chicago's most storied PE firms, including Willis Stein and CHS Capital, folded during the recession. Chicago PE firms that focus exclusively on one sector, like healthcare, have tended to flourish during the same period. Shore Capital emerged in 2009 and raised its first fund of $112.5 million in 2014.
4. Chicago PE firms are eager to invest. RoundTable Healthcare Partners raised $650 million in September 2015, Linden Capital raised $750 million in March 2015 and Cressey raised $615 million in December 2014.
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