Hello from San Francisco!
For many of you reading this, you’ve just about survived “JPM week” if you haven’t already wrapped up your whirlwind of speed dating with management teams, PE firms, banks, lenders and so on. Are you sleep-deprived and ready for another vacation?
As one sponsor noted: “If you make it to 80 percent of your meetings, you’ve had a successful week.” I’m with you.
For the healthcare private equity community and many other attendees, the JP Morgan Healthcare Conference is much more about all the shenanigans taking place around the Westin St. Francis, where the actual event is held. It may be taboo for bankers to show up at competitors’ conferences. JPM is the exception. Banks, law firms and other advisory groups, large and small, stake out hotels and restaurants in the surrounding area. And there’s not enough time to hit every reception each night, if that’s your thing.
As I write this hurriedly amidst Day 3 networking and evening receptions, here’s a bit of what I’m hearing about 2019’s outlook for healthcare PE.
The deal pipeline is status-quo — especially in healthcare services. There’s lots of noise around the credit markets. But it’s still a great time to sell and valuations remain strong. While pricing in the debt markets could eventually “let the air out of the valuation balloon,” as one GP put it, that has yet to reduce sponsors’ eagerness to transact or price expectations in the healthcare arena.
There’s also no big healthcare policy overhang issue that’s widespread. The possibility of ACA repeal and the Trump administration were major topics of conversation in recent years, but that’s no longer the case. There’s certainly vertical-specific policy issues folks are talking about. But for now, broadly, Washington is quiet.
An interesting side note: JPM week is typically a popular time for companies to unveil their blockbuster megadeals. This year in healthcare services: nada. There were plenty of deal announcements but nothing so sizable or transformative that changes the industry landscape in a big way. Coincidence? A result of the cooling off in the public markets? What do you think? Hit me up with thoughts at firstname.lastname@example.org.
If you build it, they will come
People love to hate JPM. Or maybe it’s more of a “love-hate” relationship. Either way, the crowd keeps coming back to the Bay each January to kick off the year.
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