Healthcare-focused private equity is on the brink of a record year. Capital has flowed into the sector, with healthcare-focused private equity-backed buyout deals seeing year-on-year increases in aggregate deal value since 2015. 2018 saw the announcement of the largest healthcare-focused deal since the Global Financial Crisis: KKR bought Envision Healthcare Corporation from Clayton Dubilier & Rice, a public-to-private deal worth $9.9bn. As at November, 585 healthcare-focused deals have been announced in 2018 YTD, worth a total of $56bn – putting the year on track to surpass the 619 deals worth a record $57bn seen in 2017.
Deal activity looks set to increase further too, as the industry holds $56bn in dry powder, pushing total assets under management to $199bn. The bulk of healthcare-focused private equity dry powder is focused on North America, with fund managers earmarking $36bn for the region.
Although just 84 healthcare-focused private equity funds have held a final close as of November, they have raised $22bn, bringing the average fund size to $261mn – the largest average fund size for the healthcare industry in over a decade. This year also marks the fourth consecutive year in which the industry has raised over $20bn and puts the year on track to hit similar levels to those seen in 2017, when 140 funds raised $26bn.
To see more healthcare-focused private equity data, read the full Private Equity Injects Fresh Capital into Healthcare factsheet.