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Large Private Equity Firms Continue to Expand their Footprints in Healthcare During the COVID-19 Pandemic

Large private equity firms have continued to leave a major economic footprint in the healthcare industry. Since 2009, private equity investment in healthcare has outpaced the rate of private equity investments in general. According to data provider Pitchbook, investment in this sector accounted for about 14 percent of the deal value of the private equity market in 2020, up from 8.9 percent in 2009. This surge in investment activity includes investments by some of the largest private equity firms in the market.[i]

Below are the top 10 private equity investors by deal count and deal size as of 2020:

Largest PE Healthcare Investors (Deal Count)

PE FirmDeal CountDeal Value ($billion)
Audax Group215$2.9
Waud Capital Partners121$1.2
Welsh, Carson, Anderson & Stowe118$14.8
Shore Capital Partners106$0.1
Summit Partners105$9.7
Kohlberg Kravis Roberts90$42.9
Linden Capital Partners82$2.1
Webster Equity Partners82$0.2
Water Street Healthcare Partners79$2.4
ABRY Partners78$0.8

Source: Pitchbook

Largest PE Healthcare Investors (Deal Size)

PE FirmDeal CountDeal Value ($billion)
AlpInvest Partners77$43.5
Kohlberg Kravis Roberts90$42.9
TPG Capital76$31.6
Canada Pension Plan Investment Board29$31.0
Cinven36$28.2
Kensington Capital Partners1$26.4
The Blackstone Group55$26.2
The Carlyle Group62$25.9
Leonard Green & Partners35$25.1
Bain Capital52$23.6

Source: Pitchbook

Many of the private equity firms on these lists are well known and have also experienced their share of controversy related to their investments in the healthcare sector.

For example, Leonard Green & Partners and minority owners siphoned over $645 million in debt-funded dividends from safety net hospital chain Prospect Medical Holdings[ii] while the hospital system suffered from poor quality ratings, operational challenges, and deteriorating conditions.[iii]

Kohlberg Kravis Roberts (KKR) owns BrightSpring Health Services (formerly known as “ResCare”), a company specializing in home healthcare. While it was still known as ResCare, BrightSpring has come under fire for allegations of Medicare fraud,[iv] lapses in patient care[v] and wage and hour violations.[vi] Particularly egregious behavior by one of its affiliates in West Virginia prompted an investigation by the state’s Office of Health Facility Licensure and Certification. Despite quality issues at BrightSpring, the company has continued to grow substantially in recent years, acquiring four home health and hospice companies since the beginning of 2020 (Advanced Home Care, Sacred Journey Hospice, Abode Healthcare and Dare Home Health & Hospice).

The Blackstone Group owns Apria Healthcare, a company that provides home respiratory therapy, home infusion therapy and home medical equipment. Ten days before Apria paid a $40.5 million settlement for allegations of billing fraud, Blackstone collected a $200 million debt-funded dividend from the healthcare company.[vii]

Bain Capital and J.H. Whitney own Aveanna Healthcare, another home health company. In 2019, Bloomberg published an article that reported on how Aveanna’s profit-driven business practices harmed patients and employees alike, such as creating artificial staffing shortages due to its reluctance to pay caregivers overtime.[viii]

Notwithstanding the controversy that it has garnered, private equity investment in the healthcare sector has continued to grow at a rapid pace. According to Pitchbook, private equity investment in healthcare continued to expand in 2021. In all, as of December 31, 2021, the number of private equity deals increased to 733 from 703 in 2020, with a combined deal value of $77.5 billion.[ix]

Although the Covid-19 pandemic has wrought operational challenges for many companies, it has also unlocked new financial horizons. Laboratories that pivoted to create COVID-19 tests benefitted from new revenue streams that had not existed prior to the pandemic. Healthcare IT companies, such as those that provide electronic health record software and billing/revenue cycle management software, have also become attractive investments, among others. As private equity investment in the healthcare sector continues to grow with no end in sight, the public should work to ensure that private equity’s profit driven business model of creating a large return (often 25% or more) over a relatively short period of time (usually 3-7 years) does not undermine the mission of the healthcare companies to provide care.


[i]https://files.pitchbook.com/website/files/pdf/PitchBook_Q3_2020_Analyst_Note_The_Healthcare_PE_Investment_Landscape.pdf#page=1

[ii]https://www.propublica.org/article/rich-investors-stripped-millions-from-a-hospital-chain-and-want-to-leave-it-behind-a-tiny-state-stands-in-their-way

[iii]https://pestakeholder.org/leonard-green-owned-prospect-medical-threatens-to-close-safety-net-hospitals-after-attorney-general-asks-owners-to-return-a-portion-of-dividends/

[iv]https://oig.hhs.gov/fraud/enforcement/iowa-home-care-company-to-pay-563-million-to-settle-false-claims-act-allegations/#:~:text=ResCare%20Iowa%20Inc.%20has%20agreed,Department%20of%20Justice%20announced%20today.

[v]https://www.wvgazettemail.com/news/investigation-8-rescare-clients-with-special-needs-not-given-3-700-medication-doses/article_65f6167a-b48b-54c1-83ce-5994383b2285.html

[vi]https://www.dol.gov/newsroom/releases/whd/whd20150909-1

[vii]https://pestakeholder.org/blackstone-collects-debt-funded-dividends-from-apria-healthcare-within-weeks-of-billing-fraud-settlement/

[viii]https://www.bloomberg.com/news/features/2019-10-22/death-and-deals-sick-children-suffer-private-equity-profits

[ix]https://files.pitchbook.com/website/files/pdf/2021_Annual_US_PE_Breakdown.pdf#page=1

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