When stars align
Key takeaways
- Historic valuation opportunity
Public healthcare multiples sit at 30-year lows relative to the S&P 500 despite accelerating innovation and record strategic demand ($318 billion in M&A across 2,500+ transactions in 2025). Policy clarity in 2H 2025 removed the overhang, but valuations remain compelling. - Competition has narrowed dramatically
Total healthcare investment capital declined to ~60% of 2021 levels, driven largely by generalist investors exiting. Specialist investors with scientific expertise and operational networks now dominate a less crowded market. - GARP has returned to private healthcare markets
After years rewarding early-stage narratives, capital now flows to companies with proven science, commercial traction and paths to profitability — the core territory of growth equity. - Portfolio construction benefits are compelling
Years of underperformance versus technology creates rebalancing opportunities for concentrated portfolios. Private healthcare offers differentiated return drivers and ballast without sacrificing growth — particularly when accessed through private markets. - The window is open
Valuations compressed before fundamentals deteriorated; deal activity rebounded before multiples expanded. For disciplined investors, the period between policy resolution and valuation normalization has historically been optimal for entry.