PE chases opportunities in healthcare tech, Centre Partners completes two-asset GP-led

Morning Hubsters!

This is Chris, on for Wire Wednesday.

How are things looking? Fundraising remains challenging, but we’re picking up a lot of chatter around deals. And GPs are in conversations about various paths to liquidity, to try and deliver proceeds back to increasingly capital-starved LPs.

A source told me they’ve never seen so many continuation fund opportunities – both single and multi-asset – but how many of them make it to final close is still a question.

Health tech
PE Hub Europe spoke with private equity professionals about health tech valuations, growth drivers and what sub-sectors are attracting attention. The need for digitization and cost efficiency is driving growth, as well as “the aging population and rising healthcare demand,” according to Anders Petersson, managing partner, healthcare sector lead at IK Partners.
A growing emphasis on data and analytics will drive innovation and help create more personalized treatment, according to Jean-David Herld, senior associate at growth investor Revaia, in a conversation with PE Hub Europe reporter Irien Joseph.

As well, demographic changes are creating the need for more efficiency in healthcare. “In Europe, we’re seeing demographic changes towards an aging population, consumerization of healthcare, challenges for healthcare workers on the ground and worker shortages,” said Gareth Down, European head of healthcare investment banking at William Blair.

To meet these needs, specialized companies are starting to overcome hurdles like stricter regulatory requirements across the value chain, which have slowed the industry’s adoption of newer tech.

Firms have plenty of money to chase deals, according to William Blair’s Down. “High levels of dry powder for both private equity funds and strategic acquirers mean there is a lot of capital to be put to work, with investors remaining confident in the health tech sector, given the supportive trends at play,” he said.

Mid-market
I’ve noticed several mid-market GP-led continuation fund deals reaching final close recently. One of those was Centre Partners, which closed a deal that moved two assets – IMA Group and Sun Orchard – into a continuation fund for more time and capital to grow the businesses.

The deal, in the range of $300 million to $500 million, was led by New 2nd Capital, sources told me. Moelis worked as secondary adviser on the deal.

Centre’s deal is part of a wave of GP-led processes that are being structured to deliver liquidity by the existing LPs. Continuation fund deals usually involve a firm’s trophy assets, and so pricing generally remains fairly strong, with slight discounts.

Read more here on Buyouts.

Integration
UBS’s integration of Credit Suisse executives and operations could take three to four years, the Swiss bank’s chairman said in April. A small, but impactful part of that decision involves Credit Suisse’s private fund group, which helps raise capital for private markets managers. The group had numerous funds in the market at the time of the UBS acquisition, and it’s not clear what happens with those fundraising mandates.

Some of the fundraising GPs have been talking to rival placement groups to potentially switch providers. Some will be absorbed by UBS, while others may be nearly finished, and don’t need to make a move.

For GPs with funds in the market, any sort of extended delay of their fundraising processes could cause headaches as they have deadlines to meet, deals to close and employees to pay. This is exacerbated by the uncertain markets, which have made fundraising more challenging than any time since the global financial crisis, sources have told Buyouts. Read more here for the details.

That’s it for me! Have a great rest of the day. Hit me up with tips n’ gossip, feedback or book recommendations at cwitkowsky@buyoutsinsider.com or find me on LinkedIn.