Private equity interest in healthcare sector continued at steady pace in 2024
February 20, 2025
Report finds PE activity in healthcare sector high, despite increasing regulatory scrutiny and high interest rates
The Private Equity Stakeholder Project (PESP) has released its latest report on healthcare acquisitions, providing an in-depth analysis of private equity dealmaking in the healthcare sector throughout 2024. Titled “Private Equity Healthcare Deals: 2024 in Review” the report delves into key trends shaping the industry and raises important considerations for policymakers, regulators, and patients.
Historically, healthcare has been an attractive space for private equity investment due to its steady demand, aging population, and fragmented subsectors ripe for consolidation. Despite the headwinds of increasing regulatory scrutiny and high interest rates, private equity firms continued a steady pace of investment in the US healthcare space in 2024.
PESP identified a total of 1,049 private equity-backed healthcare deals in the United States, consisting of 262 growth-expansion investments, 166 leveraged buyouts, and 621 add-on acquisitions to 383 unique platform companies. These deals involved at least 676 private equity firms, business development corporations, venture capital firms, private credit funds, and other types of investors.
Some firms stood out for their active participation, with at least 16 private equity firms executing 10 or more healthcare deals in 2023. Among them, Latticework Capital Management led the pack with 27 deals.
Key subsectors attracting significant investment included outpatient care, dental care, health IT, pharma services, and medtech. Home health, home care & hospice, behavioral health, and disability services were also noteworthy investment targets..
The report underscores concerns regarding private equity’s growing presence in healthcare. The PE business model, centralized on the pursuit of outsized returns over short periods, may lead to cost-cutting measures that impact patients and workers negatively. Moreover, reliance on debt financing poses challenges, particularly amid rising interest rates, as evidenced by bankruptcies of major private equity-owned healthcare companies in 2024. Private equity-backed companies accounted for 7 of the 8 largest healthcare bankruptcies in 2024.
Analysts predict a resurgence of healthcare dealmaking in 2025, driven by falling interest rates, increased dry powder, and expectations that a Trump administration will take a more favorable stance on private equity investment. Given sustained investor interest and the risks of private equity ownership—such as “stealth consolidation” that drives up costs—the report urges state and federal policymakers to strengthen oversight of healthcare mergers and acquisitions.
For more information and to access the full report, visit pestakeholder.org/private-
