Signs of Optimism in Healthcare Private Equity with Amber Walsh of McGuireWoods LLP 10-10-25

Summary

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Becker Business Podcast:

“Signs of Optimism in Healthcare Private Equity”

Guest: Amber Walsh (McGuireWoods LLP)
Host: Scott Becker
Release Date: October 10, 2025

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Episode Overview

This episode explores the current state and future outlook of the healthcare private equity (PE) space, with Amber Walsh—partner at McGuireWoods LLP and specialist at the intersection of health care and private equity—joining Scott Becker to break down recent trends, deal data, and market sentiment. The discussion centers on deal volumes, the influence of macroeconomic factors (particularly interest rates), and signs of cautious optimism for the remainder of the year.

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Key Discussion Points & Insights

1. State of the Private Equity Deal Market

[00:00–02:45]

• Recent Deal Activity:
  Amber notes that Q3 data is out quickly (<48 hours after quarter-end) from sources like PitchBook and Bain.

  • “What is reported by these deal aggregators… feels pretty consistent with what I am personally experiencing and what we are experiencing within the healthcare private equity team at McGuireWoods.” (Amber Walsh, 01:20)

• Deal Volume & Size:

  • Number of deals is down, both broadly in PE and in healthcare specifically.
  • However, the total dollars invested is up—mostly driven by large, “mega-sized” deals.
  • Indicates rising participation by large funds, while smaller deals requiring debt financing remain challenged by high interest rates.

• Interest Rates & Market Caution:

  • Until late Q3, “there was still a little bit of caution” due to interest rates not yet declining.
  • The market has shown more appetite for big, well-capitalized investments over smaller, debt-heavy ones.
  • As interest rates have recently dropped, more deals are expected in Q4, boosting optimism.

2. Exits, Bolt-Ons, and ‘Dry Powder’

[03:10–05:36]

• Exit Market:

  • Conversations about “trillions of dollars ready for exits” have persisted, but many exits have been delayed, particularly where investor valuation expectations aren’t met.

  • Some paused or stalled deals are coming back to market, encouraged by improved debt terms.

  • “With the availability of less expensive debt financing, maybe you’re going to be able to actually put those dollars to use and execute upon those exits.” (Amber Walsh, 04:23)

• Cautious Optimism:

  • Despite dry powder, some participants are in “wait and see mode.”
  • Operational improvements, efficiency goals, and investment in AI continue to be a focus—as firms aren’t abandoning organic or operational growth just because exits are looking marginally more achievable.
  • “We’re not just going to put those [operational improvements] to the side simply because we think we might have kind of a slow turnaround in the market.” (Amber Walsh, 05:18)

3. Operational Focus & Market Segmentation

[05:36–06:46]

• Operational Improvements:

  • Many are prioritizing balance sheet stability, ensuring companies aren’t over-leveraged, and focusing on operational efficiencies.
  • Lower margin businesses with significant debt are seeing more challenges, but industry-wide panic is not prevalent.

• Segments in Recovery:

  • Mega-deals (“the Blackstones of the world… they are in the business and they’re going to do deals regardless” – Scott Becker, 06:07) have already returned.
  • Small and mid-sized deals are recovering more slowly but are also showing progress.

• Overall Sentiment:

  • The tone is one of “reasonably steady” activity with “a lot of hopefulness towards improved deal volume both on the bolt on side and on the exit side.” (Scott Becker, 06:05)

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Notable Quotes & Memorable Moments

• Amber Walsh [01:20]:
  “What is reported by these deal aggregators… feels pretty consistent with what I am personally experiencing and what we are experiencing within the healthcare private equity team at McGuireWoods.”

• Amber Walsh [04:23]:
  “With the availability of less expensive debt financing, maybe you’re going to be able to actually put those dollars to use and execute upon those exits.”

• Amber Walsh [05:18]:
  “We’re not just going to put those [operational improvements] to the side simply because we think we might have kind of a slow turnaround in the market.”

• Scott Becker [06:07]:
  “…the Blackstones of the world, they are in the business and they’re going to do deals regardless…”

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Timestamps for Important Segments

• [00:00–01:20] – Introduction & Amber’s market overview
• [01:20–02:45] – Deal volume vs. deal size trend explanations
• [03:10–04:40] – Stalled exits, dry powder, and renewed activity with better financing
• [04:40–05:36] – Market optimism and ongoing focus on operational excellence
• [05:36–06:40] – Operational risk in lower margin, high debt businesses & market segmentation
• [06:40–06:46] – Closing acknowledgements

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Summary

Amber Walsh offers a cautiously optimistic assessment of healthcare private equity as 2025 closes out. While the number of deals remains below “normal” levels, the size of completed transactions suggests continued confidence from large investors. The declining cost of debt is encouraging previously delayed exits to return, though operational and structural improvements remain a parallel and ongoing focus. Mega-deals have rebounded first, small/midsize activity is building gradually, and actors across the market are positioning for increased activity into year-end and beyond.

Listeners come away with a nuanced understanding: there remains both challenge and substantial opportunity in this pivotal, evolving sector.

Transcript

[A]

This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We talk about private equity startups, technology and a lot more. We're thrilled today to be joined by Amber Walsh. Amber is our resident expert. She serves on the executive committee at McGuire woods, but she also lives at the intersection of health care and private equity and is about as good a feel for the deal market as anybody that I know. Amber, we're starting to see sort of data from this year come out and come clearer. I know that in total it was a very big quarter in the last quarter for deals in total, but a lot of that was driven by the mega sized deals. Can you tell us what you're seeing and what you're seeing out there in the private equity deal market and business market?

[B]

Yeah, absolutely, Scott, thank you. It always fascinates me how quickly at the beginning of the subsequent quarter the data comes out from some of the reporting sources that are great aggregators from the prior quarter. So within about 48 hours at the end of Q3, you started to see PitchBook, Bain and then you know, folks like Reuters and others kind of picking up the data that they tracked throughout the quarter. And it's always a really good indication and for me personally, I always appreciate what that what is reported by these deal aggregators sources feels pretty consistent with what I am personally experiencing and what we are experiencing within the healthcare private equity team at McGuire Woods. So what what they're reporting, these aggregating sources, and in particular I start with PitchBook is exactly what you said where deal volume count is down in terms of just number of deals. That's in both private equ across the board, but also specific to health care, but big dollars. So the deals that were done were big dollar deals. And that's an indication, I think, of some caution. Certainly most of Q3 was before interest rates went down where there was still a little bit of caution coming into the beginning of Q3. It's an indication of of the kind of appetite for health care from the big investors, but more caution on the smaller dollars, particularly those that require debt financing. But near the end of the quarter and certainly as we're coming into Q4, as people are starting to report on their Q4 expected volumes, signed Lois, et cetera, and including of course driven in part by the interest rates going down, you're starting to see that net number of expected deals starting to go up as we look into Q4. So it's kind of interesting, not entirely unexpected, but gives me some optimism for the end of the Year.

[A]

No, that's fantastic. And it does seem like things are reasonably busy at a reasonable flow, but not crazy. But there is again sort of discussions about bolt ons and there's a little bit of discussions about exits. What's your sense there? I mean there's this famous discussion about trillions of dollars being ready for exits. It's been delayed. Is there any hope that those will get to exits or people going to have to be very creative in figuring out what to do there?

[B]

I think there is some hope. Certainly fundraising has slowed down. Nevertheless, you do still have the trillion sitting there rating waiting to be used. And you do see some stalled deals. And I'm talking more specifically in health care now anecdotally, but also publicly reported some stalled deals, some classic exits that were put on hold a little bit because the appetite, particularly for the expected valuations just weren't where the investor wanted in order to go forward with the exit. You are seeing those come back to market now and so you're seeing some that have been paused for several month, picking back up with the expectation that with the availability of less expensive debt financing maybe you're going to be able to actually put those dollars to use and execute upon those exits. So I think there's all the reasons to be optimistic. And yet at the same time you do still have plenty of people who are in a wait and see mode. You do still see a lot of the discussion that we had over the past two of okay, yes, I'm optimistic, I'm optimistic that we might be ready to actually take a particular asset, you know, out to market. But we want to still continue to focus on these operational efficiencies, the investment in AI. We want to continue to focus on these things because we're not sure it's going to happen. And what we learned from a couple of years ago is that we had real opportunities for organic growth, growth and operational improvements. We're not just going to put those to the side simply because we think we might have kind of a slow turnaround in the market.

[A]

No, thank you very, very much. And you still see places where right people are still working on operational improvements, all kinds of things to improve things to study the balance sheet to hopefully make sure they're not over leveraged. More challenges in lower margin businesses that did high margin debt or high expensive debt, lower margin with high debt, but overall a reasonably steady without a lot of panic and a lot of hopefulness towards improved deal volume both on the bolt end side, bolt on side and on the exit side so. And the big, big deals have already come back because some of these huge, huge mega funds, the Blackstones of the world, they are in the business and they're going to do deals regardless, and they can afford to. The small and mid sized deals have been a bit slower to track and come back at the pace and volume that we'd like. But still a lot going on there as well. Amber Walsh, it's always brilliant to visit with you. One of the smartest people I get to visit with and truly to coin. Peter Drucker, one of the most effective executives I've ever worked with. Amber Walsh, leader at McGuire Wood. Just brilliant and effective. Thank you for joining us today on the Becker Business and the Becker Private Equity podcast. Thank you very, very much.

[B]

Thank you, Scott.