Private Equity Firms and the Healthcare Industry
It’s no secret that healthcare is one of the fastest-growing industries, and private equity (PE) firms have taken notice. PE firms play a significant role in the healthcare industry, investing in a variety of healthcare-related companies and organizations, such as hospitals, medical device manufacturers, biotechnology firms, and pharmaceutical companies, among others.
These firms provide financial resources and guidance to foster growth, with the ultimate goal of generating a return on investment. They also often bring in experienced executives and industry experts to help manage and guide their investments. This usually includes providing strategic advice, operational support, and facilitating access to industry networks and resources. Additionally, private equity firms may also work to improve the efficiency and profitability of the companies they invest in through cost optimization and other operational improvements.
Top 10 Private Equity Firms for Healthcare
For those aspiring to begin a career in the healthcare or private equity industries, it’s essential to understand the key players in the sector. Here, we present the top 10 private equity firms that have demonstrated a remarkable track record in healthcare investments.
1. Carlyle Group
- Carlyle Group Total AUM: $426 Billion
- Healthcare Capital: $20 Billion
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Carlyle Group stands out as one of the leading private equity firms in the healthcare sector. With a healthcare portfolio that reaches across the globe, Carlyle has invested in a diverse range of healthcare companies including pharmaceuticals, medical devices, and healthcare services, which combined have yielded substantial returns and facilitated remarkable expansion for the company.
Its healthcare portfolio also includes investments in companies that focus on a variety of healthcare issues such as mental health, chronic disease management, and personalized medicine. Additionally, they have demonstrated a keen interest in healthcare technology, investing heavily in telemedicine and digital health platforms. These investments have not only provided positive financial returns but have also contributed to the advancement of healthcare innovation and improved patient outcomes.
2. KKR
- KKR Total AUM: $553 Billion
- Healthcare Capital: $18 Billion
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KKR is another top private equity firm for healthcare known for their investments in healthcare technology and services. Renowned for identifying and developing innovative healthcare technologies, KKR’s portfolio includes companies which are currently reshaping the industry landscape. Some of their most notable investments include BridgeBio Pharma and Gamma Biosciences.
One of KKR's recent investments in healthcare technology is Brightline Inc., a leading provider of virtual pediatric mental health services. Brightline is uniquely positioned as a platform created by parents, for parents, offering tailored support for children and teens navigating a diverse array of mental health challenges. Built with a focus on accessibility and empathy, Brightline serves as a trusted partner for parents seeking holistic solutions for their child’s well-being. KKR’s investment in Brightline is part of their larger strategy to invest in companies that are expanding the patient experience.
In addition to healthcare technology, KKR also extends its investments to healthcare services. One of their more significant investments in this area is Global Medical Response, a company that specializes in providing medical transportation and services. Boasting a workforce of almost 36,000 employees spread across 50 states, the company handled a staggering 15.4 million patient encounters last year, illustrating its pivotal role in providing life-saving interventions at a rate of one every 91 seconds. KKR's investment in Global Medical Response reflects their desire to invest in companies that are improving the efficiency and quality of healthcare outside the hospital.
3. TPG Capital
- TPG Capital Total AUM: $222 Billion
- Healthcare Capital: $21 Billion
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TPG Capital has made its mark in the healthcare industry through its substantial investments in life sciences, biopharmaceuticals, and medical devices. Focused on supporting companies bringing new and innovative treatments to market, TPG Capital boasts a track record of successful investments, with some of their most notable endeavors including Exatech and Immucor.
TPG Capital's focus on biopharmaceuticals and medical devices is driven by the increasing demand for effective, affordable, and accessible healthcare solutions. The firm's investment strategy revolves around identifying companies that have the potential to revolutionize the healthcare industry through their innovative products and services. TPG Capital's investments in the healthcare sector have not only helped to drive growth and innovation but have also contributed to improving patient outcomes and quality of life.
4. Blackstone Group
- Blackstone Total AUM: $139 Billion
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Blackstone Group is a global private equity firm that has made significant investments in the healthcare industry. Having set their sights primarily on global healthcare investments, Blackstone Group demonstrates a keen interest in companies operating in emerging markets. Some of their notable healthcare investments include Alnylam and Anthos Therapeutics, Inc.
Blackstone Group’s interest in global healthcare investments is driven by the growing demand for healthcare services in emerging markets. With the rise of middle-class populations in these markets, there is an increasing need for quality healthcare services, which presents a significant investment opportunity for Blackstone Group.
In addition to investment endeavors, Blackstone Group also provides strategic support to healthcare companies with the goal to assist in their growth and expansion efforts. This includes leveraging their global network and expertise in areas such as mergers and acquisitions, operational efficiency, and financial management.
5. Bain Capital
- Bain Capital Total AUM: $180 Billion
- Life Sciences Capital: $4.6 Billion
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Bain Capital has established itself as a top private equity firm in the healthcare industry, holding a diverse portfolio of investments spanning healthcare services, medical devices, diagnostics, pharmaceuticals, and biotechnology. Some of their most profitable healthcare investments include Idagio Therapeutics and Hugel.
Beyond their profits from investments in healthcare companies, Bain Capital also has a driving commitment to improving healthcare outcomes through technology and innovation. Investments in entities like Solid Biosciences, which is working to create therapies for rare and ultra-rare genetic diseases without current treatments, and Freenome, which has pioneered a multi-layered approach for early cancer detection, underscores Bain Capital’s dedication to innovation-driven healthcare solutions.
If you’re looking for a private equity firm that gives as much as it earns, Bain Capital is also known for an outstanding philanthropic track record with support being given to multiple charities and relief funds. Most notable among these is the Bain Capital Relief Fund, which was established in 2017 to provide support for individuals affected by Hurricane Katrina, Hurricane Sandy, f*ckushima, the Boston Marathon bombing and numerous other crises.
Read: How to Land a Role at Bain Capital and How to Ace Your Bain Capital PE Interview
6. Apollo Global Management
- Total AUM: $75.9 Billion
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Apollo Global Management is another top private equity firm for healthcare, with an expanding healthcare portfolio that includes investments in biopharmaceuticals, medical devices, and healthcare services.
It’s important to note that concerns have recently surfaced regarding Apollo’s ownership of the major hospital chains Lifepoint Health and ScionHealth, where substantial debt and service cuts have given cause to patient care and worker safety issues. Despite these challenges, however, Apollo Global Management continues to expand its healthcare business through strategic acquisitions and investments in companies such as Health Management International.
7. CVC Capital Partners
- Total AUM: $125 Billion
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CVC Capital Partners has emerged as a top private equity firm for healthcare, distinguished for its strategic investments in healthcare companies with significant growth potential. They have invested heavily in biotechnology, medical devices, and healthcare services with notable investments at companies such as Sebia and Spectrum Medical Group.
In addition to their investment endeavors, CVC Capital Partners stands out for their commitment to environmental, social, and governance (ESG) factors. Recognizing the importance of sustainability in business success, the firm integrates ESG principles with their operations and investment processes, speaking to a firm dedication to long-term success through responsible business practice.
8. Warburg Pincus
- Total AUM: $83 Billion
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Warburg Pincus has established itself as a leading private equity firm for healthcare, with a focus on investing in companies that are operating in emerging markets. Recognizing the leveraging power of digital healthcare solutions, for example, Warburg Pincus has strategically invested in a number of companies at the forefront of healthcare data management and analytics. These investments include companies such as WebPT, Quantum Health, and Aetion.
9. Insight Partners
- Total AUM: $80 Billion
- Healthcare Capital: $2 billion
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Insight Partners is a private equity firm that has been heavily investing in the digital health revolution. They aim to invest in companies that are developing innovative technology solutions to improve healthcare outcomes. Some of their notable investments include Calm and Florence Healthcare.
Overall, Insight Partners has historically been a great healthcare firm focused on scaling growth-stage healthcare software companies, but the firm also boasts a recent acceleration into the healthcare sector by expanding its scope to include startup-stage companies and more diverse business models.
10. Shore Capital Partners
- Total AUM: $6 Billion
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Boasting a portfolio primarily focused on healthcare investments, Shore Capital Partners is a formidable force in the healthcare private equity sector. Despite its comparatively smaller size, Shore Capital distinguishes itself with a specialization and expertise in healthcare investments that rivals larger firms on the list.
Shore Capital’s strategic approach revolves around accelerating the growth of micro-cap businesses with a reduced risk framework achieved by creating access to capital, top-tier board and operational resources, and unparalleled networking and development opportunities. Since its inception, Shore Capital has significantly expanded its investment and operational support teams, slingshotting their track record for investment returns in the Top 1% among other private equity firms.
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