PE Investment in Healthcare to Further Grow in 2022

Private equity fund investments in the Indian healthcare sector showed a remarkable performance in 2021, as firms look to position themselves on the right side of change in an industry.

The shocking second wave of the COVID-19 pandemic has both benefited and stymied growth in the healthcare sector. Some locations, especially hospitals and skilled nursing facilities, are still struggling with increased operating costs from COVID-19 safety precautions, lost revenue, and staff churns. While other facilities, such as laboratories that pivoted to perform COVID-19 tests, unlocked a significant new revenue stream.

India, being the generic drug manufacturer and vaccines has attracted more investments, with its export potential and the pandemic boosted the income of generic pharma. Last year a lot of money went into the sector, and it continues to go this year also. Healthcare devices, supplies, and services—which include providers such as doctors and dentists—have continued to dominate overall PE deal activity. Other areas such as healthcare IT have also drawn significant PE interest.

Private equity firms have been very active in the sector, more than strategic players in the last 10-12 months and that will continue this way because they will continue to shop for good assets. There is also more interest in the digital side of the business now, where there are a lot of technology elements to it such as digital supply chain, telehealth, telemedicine, and virtual patient experience opportunities. Diagnostics is another huge segment. Hospitals are seeing traction, considering the dearth of healthcare infrastructure.

It has been said by experts in the post-Covid world too, the interest towards these sectors will be sustained and long-term because the public and governments would want to restrict such pandemics in the future and keep healthcare the top priority.

Quadria Capital, the top private equity funds in India, can be an essential means for tackling seemingly unconquerable problems. COVID-19 has forced healthcare to swivel from a historically defensive stance to a more proactive and offensive position. We now need to solve this problem and address it. We need solutions to the vulnerable population. Public policy and excellent care alone are often insufficient to tackle big issues. The private sector can help take innovative ideas and solutions and bring them to scale.