McDermott, WSJ Intelligence Research Collaboration Uncovers Significant Shift in Healthcare Private Equity


International law firm McDermott Will & Emery, in collaboration with WSJ Intelligence, is pleased to announce the publication of the white paper “The Next Evolution of Healthcare Private Equity.” The research engages with a global cohort of private equity (PE) investors, including managing directors, chief investment officers and partners of PE firms, the majority of whom work with funds with $10 billion-$100 billion in assets under management.

“The healthcare sector has undergone profound changes in recent years, and there is now an increased focus on new modes of delivery, new technologies and new shifts in the payment environment,” said McDermott Chairman Ira Coleman. “McDermott and WSJ Intelligence joined forces on this report to gain a better understanding of how private equity investors are adapting and leading through this evolution.”

The COVID-19 pandemic accelerated many of these changes, as solutions such as telemedicine and remote monitoring became more prevalent, and pandemic-related initiatives drove many decisions on resourcing and priorities. However, existing challenges persist, and continuing changes in the political landscape means uncertainty about how the regulatory environment will continue to impact healthcare investments.

“This collaboration with WSJ Intelligence and the resulting analysis of the data will provide readers with critical insight into how private equity investors are putting money to work to address the important issues facing the healthcare sector today,” said Krist Werling, a co-head of McDermott’s Private Equity Practice Group.

Key findings from the research include:

  • Almost three-quarters of respondents (74%) strongly or somewhat agree that “the healthcare sector was ripe for structural change prior to the onset of the pandemic, which has accelerated opportunities for investing in new modes of healthcare delivery.”
  • Executives from firms rated as earnings leaders (40%) see broad upside opportunities from their investments in physician practice management due to optimizing efficiencies driving lower costs and greater convenience.
  • Those same executives hold strong views on privacy and security, with more than half (53%) pointing to regulations on interoperability as the most impactful government intervention affecting historical and current investments.
  • Health IT and telehealth stands out as the subsector that will attract the most attention from private equity investors, though there are prioritization differences between earnings leaders and others.
  • A majority of respondents say PE has driven interest in biopharma investments that support the creation of COVID-19 vaccines and therapies (62%) and helped fill the gap between in-hospital and out-of-hospital care (59%).

The complete paper with all results and analysis can be found here.

PitchBook recently recognized McDermott as the most active firm in healthcare private equity for the fourth consecutive year. The Firm—the nation’s leading health law firm— handled 41 more healthcare private equity transactions in 2020 than its nearest competitor. McDermott’s Health Industry Advisory Group is the only health practice to receive top national rankings from U.S. News – Best Lawyers “Best Law Firms,” Chambers USAThe Legal 500 US and Law360.

About WSJ Intelligence

WSJ Intelligence, a unit of The Wall Street Journal’s advertising department, conducts bespoke and secondary research for brands and client brands of The Wall Street Journal | Barron’s Group. Through rigorous analysis, WSJ Intelligence provides insights that are relevant, timely, and reliable. The Wall Street Journal news organization was not involved in the creation of this content.

About McDermott

McDermott Will & Emery partners with leaders around the world to fuel missions, knock down barriers and shape markets. Our team works seamlessly across practices and industries to deliver highly effective—and often unexpected—solutions that propel success. More than 1,200 lawyers strong, we bring our personal passion and legal prowess to bear in every matter for our clients and the people they serve.

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