Karsten Langer, Managing Partner of Riverside Europe, spoke with Preqin First Close about private capital’s commitment to healthcare
Karsten Langer, Managing Partner, The Riverside Company
Karsten Langer is Managing Partner of Riverside Europe. He joined the firm in 2006, having previously worked in corporate finance at GE Capital Europe and Danske Bank. He’s based in Belgium.
The Riverside Company is a global investment firm with more than $12bn AUM, primarily private equity. Since Béla Szigethy founded the firm in New York in 1988, it’s made more than 1,000 investments, including 200-plus platform and add-on deals with healthcare companies.
Shaun Beaney, Editor of Preqin First Close, asked Karsten about investing in European healthcare, innovation, regulation, and the human factor.
We’ve been investing in healthcare in Europe for well over 20 years, and we’ve built up a decent amount of expertise along the way and a dedicated healthcare team. There are three big themes. One is navigating complexity, another is nearshoring. And of course, you can’t get away from digitalization.
Complexity has always been an issue and an opportunity, because Europe is one market for some things and many markets for other things. Healthcare is one of those sectors that still has a lot of national legislation and rules, payment schemes, and reimbursements.
It’s not straightforward to make a product and put it on the market all over Europe. You have language and cultural differences. In addition, there’s the whole question of supply chains in healthcare, which have also become more complex, whether it’s APIs in pharma or medtech.
There are more and more services being outsourced. We invested in a company called Biodue in Italy, which makes food supplements under its brand, and as a contract developer and manufacturer for other companies. It’s a good example of outsourced business models.
A good example is Dastex. It’s a German provider of cleanroom consumables used for contamination control. They have their manufacturing in Hungary and Portugal, and are supplying many factories that are being set up in Europe by bigger pharmaceutical companies
Like any other industry, healthcare is digitizing. You have a lot of telehealth services. And in the US, we’ve invested in a company called CRIO, a provider of e-source and other e-clinical software for clinical trial sites.
Big data and AI have really found their usefulness in healthcare. In product development, CROs (contract research organizations) have become big users of AI, which accelerates the development of new drugs significantly.
Our Belgian healthcare company, A.forall, which provides affordable drugs to wholesalers and hospitals, uses AI to predict and to get ahead of potential product shortages. It’s really an affordability play. They deliver pharmaceuticals not otherwise available to patients.
In the US, a company called Censis provides RFID tracking of surgical instruments to improve the sterilization of instruments. We’ve also invested in a company called Invita Healthcare, which manages the lifecycle of blood and tissue from donor to patient.
You would wish. It’s very, very difficult in Europe to get to that degree of convergence. Small steps are being made. As an example, new drugs are approved centrally, and not country by country.
However, reimbursement of products and the decision about which treatments will be reimbursed by a health service vary from country to country. There’s still a lot of progress to be made if Europe is truly to become one market. The best thing that we can hope for – and it's enough to make good investments – is to have some degree of stability, and when there are changes, that they are well planned in advance and well communicated.
You could say consumerization of healthcare is driven in a large part by the internet. Most people, when they go to a doctor now, already know a lot about possible reasons for their symptoms. People tend to Google things. I wouldn’t advise anybody to rely on self-diagnosis. But people are typically better prepared to have a discussion with the physician. And they may also be more ready to self-medicate with over-the-counter solutions, such as food supplements.
The other thing is that there’s a certain impatience that consumers are expressing. If they can use an online telemedicine solution or self-medicate for a while, they will very often choose to do that.
Obviously, the government is a large customer. In that sense, it’s a source of mostly stable funding. That attracts players who want to sell to large customers.
It comes with other downsides, regulations, and a more disparate market across European countries than you’d typically find in standard consumer products. It can be a barrier to entry, or it can be a barrier to growth.
Healthcare is generally considered a very stable industry that tends to do well as an investment in times of great volatility in the market, when discretionary consumer products may not be the best investment.
In any industry like healthcare, you really need people from the industry to run companies. We’re most frequently investing in family- and founder-owned companies. There’s very often a transition to more institutional management to suit the next stage of growth better. We often agree with the founder as part of the deal about what that transition will look like. Whatever the agreement, we then dig into our very substantial network of industry experts to find the right people.
Shaun Beaney is the editor of daily alternative assets industry newsletter Preqin First Close. It’s quick, easy, and free to subscribe here.
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Special thanks to Henrietta Hirst at Hydra Strategy and to Diego Velasco at BlackRock.
The views expressed are the opinions of Riverside Partners LLC, provided as of July 2025. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. Riverside Partners LLC is not affiliated with Preqin.