Private Equity’s Healthcare Boom Is Getting More Crowded

Private equity activity in the global healthcare sector set a new record last year with an estimated $191 billion in deal value, according to new data from Bain & Company.

Healthcare remains one of PE’s best-performing sectors, driven both by its scale and durable demand from aging demographics, noted Nirad Jain, senior partner at Bain & Company.

“Healthcare is infrastructure. In the U.S., it’s like 20% of the economy. Healthcare demand is ever-growing because of immutable trends around demographics and underlying health,” he remarked.

PE investors have historically under-allocated their capital to healthcare, and firms have been catching up to what Jain called a “fair share” of investment relative to healthcare’s economic footprint. Healthcare has also underinvested in technology for decades, creating opportunity for PE to modernize healthcare organizations’ operations and infrastructure, he added.

The segments that saw the most PE deal activity in 2025 were pharma and providers. PE activity is ramping up in the pharma services ecosystem, Jain pointed out. He noted that attractive targets include services for packaging, filling and sterilization, especially for injectable drugs like GLP-1s, as well as clinical trial sites, data collection companies and analytics firms.

As for the provider segment, PE investors are zeroing in on technology that can enable better frontline care, such as workflow automation tools and diagnostic technology, Jain declared. He said three forces are driving this interest: severe underinvestment in healthcare IT in the past, labor shortages coupled with wage inflation, and the macroeconomic need for better efficiency and cost control.

PE firms are especially interested in backing tools aimed at improving provider productivity or reducing organizations’ reliance on scarce labor pools, such as radiologists or nurses, Jain stated. 

He added that competition for healthcare assets like those is intensifying as more private equity investors pile into the sector. 

“Fifteen years ago, there were 175 unique private equity firms that were doing healthcare deals, and last year, that number was 350,” Jain said.

This puts more pressure on pricing and deal terms. As a result, he explained that traditional buyouts are increasingly competing with deals between private equity firms, corporate spinoffs and take-private transactions.

At the same time, the pressure to generate successful exits has gone up as portfolios age and firms sit on record levels of dry powder.

Jain said the combination of heightened competition, aging portfolios and mounting exit pressure is reshaping how PE firms are approaching healthcare deals. While demand for high-quality assets remains strong, he noted that weaker or underperforming companies will eventually need to be reckoned with. 

Even so, Jain said healthcare’s track record as a reliable source of returns will continue to make it a top priority for PE investors in 2026.

Photo: Andriy Onufriyenko, Getty Images