Healthcare Private Equity Nears a Turning Point 

For several years, healthcare private equity has favored buyers. That advantage may now be shifting back toward sellers. Three forces are driving the change: pressure on sponsors to return capital, wider use of structures beyond conventional sponsor-to-sponsor sales, and artificial intelligence, which is compressing diligence timelines without reducing scrutiny. 

The Market Outlook 

The clearest pressure point in private equity is liquidity. Sponsors need to return capital to limited partners, while buyers remain selective. That tension helps explain why our team at Jefferies has been so active in 2026. Pharma services have been our busiest middle-market vertical, particularly for businesses with roughly $30 million to $60 million of EBITDA. Fewer buyers may enter a process, but those that do are typically more committed, creating real competition for high-quality assets. 

Where Deals Are Happening 

Sponsor-to-sponsor activity rebounded in 2025, but these transactions remain difficult when both sides are sophisticated and focused on protecting returns. As a result, three structures are drawing particular attention: 

• Carve-outs, especially in medtech, as large strategics divest non-core assets. 

• Joint ventures, in which strategic buyers and private equity sponsors invest alongside one another. 

• Take-privates of underperforming public companies, sometimes amid activist pressure. 

At the same time, established firms are emphasizing value creation over multiple expansion. Investors increasingly underwrite exits at or below entry multiples, putting more weight on operational improvement. A business with fixable flaws, bought at the right price, can offer more room to create value than a pristine asset priced for perfection. 

Exits and Holding Periods 

Sponsors are also holding trophy assets longer through continuation vehicles. GP-led secondary volume reached $115 billion in 2025, up 53% from $75 billion in 2024. Continuation vehicles are the predominant structure within GP-led secondaries, allowing sponsors to provide liquidity to existing investors while retaining exposure to selected assets. 

That model raises a harder question: how many times can an asset move from one vehicle to another? Companies acquired at peak valuations in 2020 and 2021 will increasingly test long-held assumptions about valuation, holding periods, and exit timing. 

Exit strategy now sits at the center of the investment case. New investments are easier to support when the path to liquidity is clear, often through a sale to a large pharmaceutical, medtech, distribution, or payer company. 

AI: Faster Diligence, Same Competitive Dynamic 

Artificial intelligence is changing the mechanics of dealmaking. Buyers can digest data, test scenarios, and draft investment committee materials faster; committee members can then use their own tools to challenge the analysis. The result is more work in less time, not less diligence. 

AI has not changed the basic rules of price discovery. A model may support a valuation above the asking price, but no buyer will volunteer to pay more. Only a competitive process closes the gap between intrinsic value and the market-clearing price. 

The disruption risk is also uneven. In software markets with low switching costs, AI can weaken incumbent intermediaries. Healthcare IT is better protected by regulation, embedded workflows, data-integration requirements, and long-term customer relationships, though none of those barriers is permanent. Incumbents still need to build AI into their products rather than rely on insulation alone. 

GLP-1s: Science Driving Dealmaking 

Few scientific developments have attracted as much investor attention as GLP-1-based therapies. Their impact extends beyond drug developers to an ecosystem that private equity is watching closely: 

• Pharma-services providers and contract manufacturers. 

• Sterile-injectable manufacturers. 

• Producers of prefilled syringes and specialized packaging. 

The science is still expanding. Researchers are evaluating GLP-1-based therapies across cardiovascular, kidney, liver, neurological, and substance-use disorders. Some uses beyond diabetes and obesity have already won approval: in December 2024, the FDA approved tirzepatide for moderate-to-severe obstructive sleep apnea in adults with obesity. Harvard researchers continue to highlight the breadth of potential new indications, while emphasizing that clinical evidence is still developing. 

For dealmakers, the implication is clear: GLP-1 therapies are reshaping demand across the pharmaceutical value chain, and the companies that support their development, manufacture, delivery, and packaging should remain in focus for years. 

Looking Ahead 

Healthcare private equity is entering a new phase. Pressure to return capital is rising, exit planning is becoming more rigorous, and AI is changing how opportunities are evaluated. Together, those forces are creating both constraints and openings for investors. The 2026 Jefferies Global Healthcare Conference in London offers a timely forum to assess the market, compare perspectives, and consider what comes next.