The healthcare sector is anticipated to remain an attractive investment for private equity in 2023, especially in high-demand categories such as behavioral health, health IT, and specialty physician platforms such as orthopedics, according to Kirland & Ellis.
They also anticipate a strong investment market across the life sciences, including transactions involving specific drug compounds and patented molecules, as well as ancillary businesses such as clinical research organizations, pharmaceutical outsourcing and consulting services. These types of healthcare investments are viewed as relatively downward resilient, with recessionary factors countered by the base high-demand volume. Liability management is expected to remain active amidst a fairly tight credit market.
Federal and state regulators are expected to continue to concentrate on private equity investments in healthcare. On February 13, 2023, the Centers for Medicare & Medicaid Services (“CMS”) announced a proposed rule that would require skilled nursing facilities and nursing homes to disclose more information about their ownership and management, including whether they are owned by private equity firms or real estate investment trusts (REITs). Read more.
