Healthcare PE Hits $191B in 2025: Biopharma, Medtech & IT Fuel Global Surge

The 2025 performance in healthcare private equity (PE), per Bain & Company, represents both a resurgence and structural shift. While deal value reached unprecedented highs—$191 billion—this was not merely volume chasing. Much of the growth came from mega-transactions (deals exceeding $1 billion), which offset softness earlier in the year, especially during Q2 when tariff pressures slowed activity in Asia-Pacific and North America. Exit value, which had been muted, rebounded sharply—to $156 billion—reflecting both favorable market conditions and a build-up of sponsor-owned assets ready for liquidity.

Sectorally, biopharma continues to dominate value, but providers (especially with tech overlay), medtech, and healthcare IT are emerging as critical engines. For example, healthcare IT deal value more than doubled within provider services, underscoring the push for efficiency, data, and automation in care delivery. Medtech deal volume rose ~20% alongside value nearly doubling, signaling renewed interest in durable hardware and instrumentation plays.

Geographically, Europe stands out: deal value in 2025 nearly doubled year-over-year, with biopharma and provider deals leading, and larger cap transactions re-emerging. North America’s growth hinged on large deals, with 26 $1B+ transactions (vs 14 in full year 2024), majority being sponsor-to-sponsor. In Asia-Pacific, despite macro/regulatory headwinds, deal value exceeded the 2021 high by ~30%, with India, Japan, and Australia/New Zealand driving momentum, and Greater China improving from prior lows.

However, elevated valuation multiples, financing costs, regulatory uncertainty, and LP expectations create a challenging operating environment. Sponsor-to-sponsor exits, while back, only work if assets are well positioned; value creation must be front and center. Carve-outs and public-to-private deals offer pathways, but integration risk and deal complexity increase. Finally, while growth is strong, investor attention must watch where defaults, risk of guidance downgrades, or sector-specific regulation (drug pricing, reimbursement) might weigh on assets.

Strategic implications for PE managing directors and firms include prioritizing must-win sectors (biopharma R&D platforms, clinical trial IT, provider analytics), stemming risk through disciplined diligence on AI deployment and regulatory exposure, structuring exits early, and building partnerships or portfolios that anticipate tight capital markets. LPs will press on returns and liquidity; firms that can deliver multi-factor growth (margin + revenue + multiple) will outperform in high competition.

Open questions include: how regulatory shifts (especially U.S. federal pricing policy, antitrust) will affect deal underwriting; whether valuation multiples can sustain elevated levels; how exit markets (IPO, strategic acquirers) will absorb the backlog; and how investor behavior may shift if macroeconomic pressures recur.