Return to search

Global disruption and inflation playbooks; plus, Vestar bets on virtual care

Taking a look at a new private equity report.

Good morning, dealmakers. MK Flynn here, with today’s Wire on a sober Monday morning.

Uncertain times. After a record-breaking year for private equity, the ground has shifted, writes Hugh MacArthur, partner, Bain & Co., in the firm’s 2022 Global Private Equity Report, which was published earlier this morning.

“While we believe the outlook remains strong in 2022, several important factors will weigh on investors’ minds as they think about doing deals,” MacArthur says. “Covid-19–related issues have increased inflation to levels not seen in the US and other markets in 40 years. Russia’s invasion of Ukraine has dialed up global disruption, causing uncertainty around supply chains, energy prices, and other economic factors, as well as untold human suffering, fear, and panic. There’s no way to know how these global disruptions will play out, but the reaction from the Federal Reserve and other central bankers will shape current and future dealmaking. One thing is for certain: There are now inflation playbooks developing across the GP and LP landscape, as investors race to protect margins and future returns.”

I’d love to hear how you’re handling these increasingly uncertain times. Email your thoughts to me at mk.flynn@peimedia.com

Spotlight on healthcare. And now for a look at healthcare with the latest installment of PE Hub’s ongoing series.

“Virtual care has shown enormous promise and has become more widely accepted,” Mike Vaupen, managing director and co-head of healthcare of Vestar Capital Partners, told Aaron. “Going forward, telehealth will increasingly become an integrated component of how care is delivered. There will be less of a distinction between virtual care and in-person care. Patients will look to find convenient and tech-enabled ways to receive care. Providers will look for ways to reach more patients and solve their staffing challenges – virtual care addresses both of those issues.”

Healthcare still has a long way to ago when it comes to technology adoption, Vaupen explained.

“Electronic medical records, for example, were primarily designed to be digital versions of paper charts, so that was version 1.0 of moving healthcare from a paper-based industry to one that is digital,” he said. “As a result, the systems that were designed and implemented don’t interact well with each other, and that creates complications when trying to standardize data sets. There are structural challenges that prevent healthcare from moving faster in adopting technology and being able to harness the full value. We will get there, but it will take time.”

For more, read the full story.

Lighter side. Buyouts’ Off-duty column provides a snapshot of top investors, including a few details about what they do in life when not chasing deals. The latest edition, written by Kirk, spotlights Holden Spaht, managing partner, Thoma Bravo. Spaht has been the point person on many of the firm’s top software deals, including mortgage finance tech company Ellie Mae, the 2020 sale of which realized a 217 percent gross IRR, earning it Buyouts’ Deal of the Year. Here’s a snippet from the story:

If you weren’t in PE, what job would you like to have?

Host of ESPN’s College Gameday.

How do you relax when you’re not working?
Travel, working out and golf.

What book are you reading right now?
Christopher Leonard’s The Lords of Easy Money, about the Federal Reserve.

What is your favorite song, album, performer or music genre?
Country music, especially Waylon Jennings, Johnny Cash and Willie Nelson.

Check out the full story.

Some good news. New York City’s covid cases are decreasing while vaccination rates are increasing, prompting Mayor Eric Adams to remove restrictions. For example, masks are now optional in K-12 schools. For us at PE Hub and Buyouts, that means more face-to-face time with colleagues and sources. This afternoon, I’m looking forward to seeing co-workers in our New York office!

Until tomorrow,
MK