Private equity (PE) investment in healthcare services has experienced a notable decline in recent quarters. According to a PitchBook report, the third quarter of 2024 saw 148 PE deals announced or closed in the healthcare services sector, a decrease from 185 in the previous quarter. This trend suggests that the total deal count for 2024 could be 15% lower than in 2023.
Several factors have contributed to this downturn:
- Economic Pressures: High interest rates and increased labor costs have made investments less attractive.
- Regulatory Scrutiny: Heightened oversight has led firms to reassess their investment strategies.
Despite the current slowdown, there are signs of a potential rebound. PitchBook notes that acquisition pipelines are filling up, and sellers’ price expectations are beginning to fall, indicating a gradual increase in dealmaking on the horizon.