New York City-based Oliver Wyman released findings on private equity deals in healthcare based on data from the first half of 2022.
Here are five takeaways from the report:
- The amount of private, capital-backed healthcare deals has significantly declined.
- There has been a higher level of capital invested in 2022 so far, mainly because of Bain Capital and Hellman & Friedman's $17 billion buyout of health tech company Athenahealth in the first quarter.
- Pharmaceuticals, biotech and health tech have become more popular, with pharmaceuticals and health tech accounting for more than 70 percent of total capital investments. Pharmaceuticals came in at 37 percent and health tech at 36 percent.
- Despite a lower volume of deals, the first half of 2022 could outperform the first half of 2021 because most capital in 2021 was invested in the second half of the year.
- Expected trends include investors becoming more rigorous in their approach to maximizing valuations and startups seeing a need to moderate funding expectations and to partner with other companies. Additionally, with the size and capital of the current market, the main way for investors to generate return will be through on-the-ground valuation.