← Becker Private Equity & Business Podcast
Becker Private Equity & Business Podcast
Healthcare PE Trends: Innovation, Investment Shifts & Market Outlook with Holly Buckley of McGuireWoods LLP 5-22-25
00:11:33
In this episode, Holly Buckley, Chair of Healthcare at McGuireWoods, joins Scott Becker to share key takeaways from the McGuireWoods Healthcare Private Equity Conference, including a cautiously optimistic market outlook,
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- [00:01]
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- [00:30]
Scott Becker
This is Scott Becker with the Becker Private Equity and Business Podcast. Thrilled today to visit with Holly Buckley. Holly shares the McGuire Woods Healthcare Private Equity Conference does an incredible job of it, and we're going to talk to her a little bit about some of the lessons learned and thought she had coming out of last week's McGuire Woods Health Care Private Equity Conference. Let me tee it up and ask you for a few observations of what you saw and what you're seeing and thinking.
- [00:59]
Holly Buckley
Yeah, happy to do so. And it was a really fun, energizing few days. There's a lot of content there and still processing some of it. I had the privilege of interviewing Lance Armstrong, which was really fun and he was a very interesting guy and had the entire room very much captivated. But in terms of the actual substance around healthcare private equity and investing and lending, few core thoughts, I'd say in terms of the overall market outlook, I would frame it as cautious optimism amid regulatory and economic headwinds. And so I would say the investors that we had speaking and just in informal discussions with folks, we talked about optimism of increased deal flow coming up in certain sectors, not across the board. So sectors such as health, tech, IT infrastructure, pharma services and even Medicaid heavy areas. There was a fair amount of optimism notwithstanding, a fair amount of what's going on in the national landscape from a macroeconomic perspective as well as a policy perspective. And then from a state law perspective, there's really been a strategic shift from traditional provider services to more diversified investments. And there's a real focus on things like patient outcomes, access to care. I mean these have always been important themes, but the investment theses are very much focused on tapping into those themes from an IT perspective, AI perspective, and how do we really solve problems in light of the fact that generalized growth is somewhat harder to come by. I think from a lending perspective, similar to the investment side, there's anticipated to be an uptick in deal volume the second half of the year. Year the first half of the year has been slower, but really competitive pricing and aggressive terms are becoming more prevalent, especially in the middle market and the availability of capital is high, which intensifies competition for quality deal. So let me pause there for a second and we can talk about maybe some of the more specific investment trends.
- [03:14]
Scott Becker
No, I think that would be great. Let me ask you this. In terms of what everybody's sort of wondering is about deal flow, what it looks like, are the markets going to open up or is the sort of cost of debt still too much of a challenge or just too much uncertainty? What are you seeing in terms of the floodgates of deals opening? Any, any impressions?
- [03:34]
Holly Buckley
I don't know that it's going to be floodgates as much as somewhat of an opening. I think there's still a lot of trepidation, but as we continually talked about, there's so much dry powder and a lot of funds are out there fundraising. So there's, there's going to be even more. So deals are happening and there will be more deals happening, but we're seeing deals happening in different spaces. So a lot of deals in kind of IT companies and companies looking to support the provider services businesses, but less in the actual provider services businesses. But then we're seeing more activity in certain sub segments. So we're still seeing a fair amount of interest in behavioral health but it's not going to be just kind of a, not as much in just kind of generic provider services, but maybe more in telemed or tech enabled platforms that are still delivering care. But maybe have another angle. We're weirdly seeing, I don't know if it's weirdly or not, but continued activity in a resurgence of activity in DSOs Dental support organizations which is just. That was kind of one of the first big waves kind of 10, 15 years ago and it just kind of continues due to the massive market and the continued fragmentation. And then we're also seeing investments in wellness services, but we're seeing for example, Wellness Med Spa, longevity medicine and kind of businesses like that starting to grow, grow more. And then we're also seeing a lot in life sciences and pharma services. So I don't know it's going to be floodgates, but I think we will see growth in health care private equity deals through the end of the year but not, not a massive amount but some increase from where we're at right now.
- [05:28]
Scott Becker
And dental is a fascinating area area because it comes with lots of different funding sources, Medicaid Direct, some health plans, some other places and so forth. And everybody seems to need dental work and there's 200,000 dentists in the dentists in the country. So it seems like there's a big enough business, there's still opportunity even in changing times. And certainly that's been up and down what is just a couple years ago, behavioral health was really hot. Veterinary health was really hot. What are things are you hearing about that people are talking about a lot?
- [05:58]
Holly Buckley
Yeah, I mean, I think behavioral health still. I think one of the really interesting things that was a surprise to me was an interest in Medicaid heavy businesses, which I thought were going to be somewhat DOA in light of the proposed Medicaid cuts that are going through the federal budget process right now. But there was a fair amount of, I'd say, excitement around the possibilities of investing in Medicaid focused businesses that were involved in doing those better. And so I think a lot of folks saw opportunity with that. So for example, if the work requirements become a much bigger factor, there's potentially opportunities for funds looking to invest in how to better facilitate the work requirements. And I think just Medicaid being so big and so important, but with the federal government so focused on it, I think we are going to see a fair amount of focus there. I think the other big provider area that we continue to see really big interest in is infusion. I think with the growing significance of specialty medicine and individualized medicine and the push to get health care out of more expensive venues and into the home and more affordable outpatient venues, infusion remains really high on the interest list for a lot of fun.
- [07:26]
Scott Becker
Thank you. And in other areas that you think are really sort of top notch right now and so forth.
- [07:33]
Holly Buckley
Yeah, I'd say life sciences and pharma services deals are still really big interest. So clinical trials, contract manufacturing and things like that. But also looking at automation in the pharma services space and the use of AI in pharma services was something we heard a fair amount of discussion around. So AI's role in clinical trial design, drug discovery, decentralized trial management, as well as just kind of automation around the entire pharma services spectrum, so around things like the compliance function. So I think we'll continue to see a lot of interest there and then a lot on the digital health side, like how can we automate different parts of the healthcare cycle as well as kind of the integration with payers. So again, just less on the direct provider services, provision of care side and more on the support services around the delivery of care.
- [08:31]
Scott Becker
Thank you very, very much. And talk about when you come out of the conference, Holly, you see so much activity and there's been years where the country's been in the recession. So the conference is very depressing and everybody seems to be there, like have to be there, seem to be looking for jobs. There's other times where deal activity is so insane that it's, that it just is just a non stop activity. This year I'd say the temperature was very, very healthy. Now it's in effect that the private equity business has been a little bit slower because people have been concerned about the cost of debt. There's been this long hold period for a lot of things and so forth. Talk a little bit about what are you focused on and excited about coming out of this conference, which was very inspiring and very positive.
- [09:17]
Holly Buckley
Yeah. And I mean I think Scott, timing is everything. I'd love to take credit for a great timed conference, but I think had the conference been two months earlier when all the tariff discussions started, I think the mood would have been very different. And I think with somewhat of a pullback on the tariff discussion and the stock market somewhat rebounding to almost normal levels, I think there was a lot more optimism and a much better vibe than there would have been if the conference had been two months earlier. So we were lucky with the timing there in terms of just the energy and the vibe. But I think what I'm really focused on was that we had a lot of just great conversations with folks about what they're looking at and kind of ways that we can help and connect people. And so we're really focused on that and then hopefully just getting into a good deal cycle for the next 3612 month time period. So really just looking to figure out how we can add value for our clients and our friends in the market as they're continuing to, to look to get investments and execute on.
- [10:22]
Scott Becker
Thank you very, very much. Holly, anything else you'd like to share with us today? Coming out of the conference last week?
- [10:31]
Holly Buckley
You know, I just want to thank any, anyone that was listening today that was there. Thank you. I had one or two folks come up to me and say that they, they enjoy listening to your podcast, Scott, and that they have listened to some of our discussions. And so I'm happy that those people are out there and it's always fun to hear and I think there's a few events coming up we'd love to make folks aware of. We're going to be in New York June 11th and 12th for a new York and then Connecticut Healthcare private equity pop up meetings in each of those spots on those dates. If anyone's interested in those, feel free to reach out and then we will have our Healthcare Growth and Operations conference in Charlotte September 16th, 16th and 17th. Feel free to reach out for that too, but just appreciative of all of the work that went into it and what a great time we had last week.
- [11:24]
Scott Becker
Holly, thank you very much. I loved getting a chance to visit with you and talk healthcare, private equity trends and just general business and leadership with you on the Vector Private Equity podcast. You are as good as it gets. I know we have another colleague who thinks that he is so brilliant and the very best, but you are the very best and don't let him hear that. Holly, thank you as always for joining us on the Becker Private Equity and Business podcast. You are the smartest and the most articulate and your other colleague is absolutely fine. Thank you for joining us.
- [11:58]
Holly Buckley
Thank you Scott.
- [12:03]
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