Healthcare private equity: Commercial value creation must start in diligence

As healthcare investors face tougher scrutiny and slower exits, diligence must do more than confirm whether an asset is attractive. It should reveal where value can realistically be created, how confidently it can be underwritten, and what needs to happen from day one to capture it.

The fundamentals of healthcare are still intact. What's changed is the standard of proof.

Aging populations, care delivery and therapy innovation, pressure on health systems to do more with less: these tailwinds have not gone away and will not for the foreseeable future. No wonder healthcare remains a priority sector for private equity investors.

But the investment environment is different. Higher cost of capital, longer hold periods, and more selective exit markets have all raised the bar. The difference is that attractive market, credible position, and solid historical growth no longer close the IC conversation. 

Investors need a clearer, more…