WEBVTT 00:00:00.041 --> 00:00:00.917 Bob, welcome. 00:00:01.167 --> 00:00:06.548 How have you seen private equity in health care evolve over last year? 00:00:07.507 --> 00:00:10.552 Well, I'd say since we were here last year at JP Morgan, we've 00:00:10.552 --> 00:00:12.679 definitely seen a bit of momentum increase. 00:00:13.138 --> 00:00:18.226 We've seen an increase in transactions—over $100 billion 00:00:18.226 --> 00:00:20.937 spent in 2024, which is definitely up from '23. 00:00:21.604 --> 00:00:24.482 We've seen a slight increase in the number of transactions as 00:00:24.482 --> 00:00:25.775 well, not just in valuation. 00:00:26.109 --> 00:00:31.531 And I think the tone heading into 2025, coming out of '24, is 00:00:31.531 --> 00:00:36.661 an upbeat tone of cautious optimism or, maybe said another 00:00:36.661 --> 00:00:39.456 way, tempered optimism going in. 00:00:39.456 --> 00:00:41.916 But certainly we feel like we can carry that into 2025. 00:00:42.042 --> 00:00:43.460 What are you expecting generally? 00:00:43.460 --> 00:00:46.337 What trends are you looking at that makes you think that that 00:00:46.337 --> 00:00:48.256 momentum is going to continue into 2025? 00:00:48.256 --> 00:00:49.257 It's a good question. 00:00:49.632 --> 00:00:50.383 A couple of things. 00:00:50.383 --> 00:00:53.553 One, despite some headwinds, we definitely believe the 00:00:53.553 --> 00:00:56.973 fundamentals in health care continue to be very attractive 00:00:56.973 --> 00:00:57.849 for investment. 00:00:58.558 --> 00:01:00.226 We're a couple of years out from COVID. 00:01:00.310 --> 00:01:03.605 So, clearly that means that we have a little bit more clarity 00:01:03.605 --> 00:01:07.108 and certainty into what a lot of those end-market subsectors look 00:01:07.108 --> 00:01:10.236 like post COVID, which, you know, gives some stability and 00:01:10.236 --> 00:01:11.237 some understanding. 00:01:12.447 --> 00:01:17.827 There's over $2 trillion of dry powder being held back right now 00:01:17.827 --> 00:01:21.456 by private equity looking to be deployed, a significant portion 00:01:21.456 --> 00:01:23.500 of that being considered for health care. 00:01:23.500 --> 00:01:27.212 So that gives us some optimism. And we believe we're going to 00:01:27.212 --> 00:01:31.216 continue to see very interesting high-quality assets being carved 00:01:31.216 --> 00:01:36.387 out of a lot of corporate portfolios, as well as several 00:01:36.387 --> 00:01:39.390 very attractive high-quality assets held within private 00:01:39.390 --> 00:01:42.018 equity funds that we're expecting to come to market and 00:01:42.018 --> 00:01:42.352 trade this year. 00:01:42.352 --> 00:01:45.355 So for all of those reasons, we're pretty optimistic about a 00:01:45.355 --> 00:01:47.649 continued momentum and a strong 2025, we hope. 00:01:48.066 --> 00:01:50.902 Where do you see the most significant opportunities for 00:01:50.902 --> 00:01:52.403 private equity in health care? 00:01:52.821 --> 00:01:55.573 There's a lot of opportunities, I think. You know, for private 00:01:55.573 --> 00:01:56.741 equity within health care, 00:01:56.741 --> 00:02:00.286 we're going to see the continued traditional areas, a lot of 00:02:00.286 --> 00:02:04.666 pharma services, some medtech subsectors are attractive. 00:02:04.958 --> 00:02:07.043 I think two areas to highlight—maybe the first being 00:02:07.043 --> 00:02:07.585 women's health. 00:02:08.378 --> 00:02:10.130 It's a very interesting part of the market. 00:02:10.505 --> 00:02:14.467 There are significant unmet and underserved needs for women. 00:02:14.467 --> 00:02:17.470 If you take menopause as an example. 00:02:17.470 --> 00:02:21.057 90% of the women deal with some kind of 00:02:21.057 --> 00:02:24.060 adverse effects of menopause. 00:02:24.060 --> 00:02:25.603 How to manage that. 00:02:25.603 --> 00:02:27.772 It's definitely not something that's on the radar screen for a 00:02:27.772 --> 00:02:28.773 lot of companies today. 00:02:28.773 --> 00:02:32.569 Lots of opportunities to really, you know, reshape how research 00:02:32.569 --> 00:02:36.447 is happening, reshape where therapies could be deployed, 00:02:36.447 --> 00:02:38.825 reshape how women are engaged in the health care process. 00:02:38.825 --> 00:02:42.036 So for me, that's a pretty interesting area to continue to 00:02:42.036 --> 00:02:43.371 explore in a lot of ways. 00:02:43.997 --> 00:02:47.125 The other continues to be around health care IT and innovation. 00:02:48.042 --> 00:02:50.879 I think there's the health care IT platforms for the 00:02:50.879 --> 00:02:52.922 sake of health care IT platforms. 00:02:52.922 --> 00:02:53.923 What do I mean by that? 00:02:53.923 --> 00:02:57.594 These are applications and services that are driven into 00:02:57.594 --> 00:03:00.096 hospitals, for instance, to help drive 00:03:00.096 --> 00:03:01.139 labor productivity. 00:03:01.306 --> 00:03:04.434 We know this will, you know, move the needle, I think, for a 00:03:04.434 --> 00:03:07.187 lot of those health care companies struggling to, you 00:03:07.187 --> 00:03:09.606 know, remain profitable and serve patients, 00:03:09.606 --> 00:03:10.773 which is very interesting. 00:03:10.773 --> 00:03:13.902 But I think also on the health care and IT side, or on the 00:03:13.902 --> 00:03:16.571 advanced technology side, we see a real opportunity there to 00:03:16.571 --> 00:03:19.282 continue to accelerate, you know, more traditional companies 00:03:19.282 --> 00:03:22.952 and how they can bring therapies to market faster, how they might 00:03:22.952 --> 00:03:25.788 be able to tailor clinical trials in a way that allows them 00:03:25.788 --> 00:03:31.002 to bring new, new therapies to market in a way that is more accessible. 00:03:31.002 --> 00:03:34.505 Go deeper on innovation. What role does innovation have to 00:03:34.505 --> 00:03:37.091 play in private equity-backed health care portfolios? 00:03:37.133 --> 00:03:38.051 I think it's twofold, 00:03:38.051 --> 00:03:39.552 very similar to what I was just talking about. 00:03:39.552 --> 00:03:41.888 I think there are some standalone companies that 00:03:41.888 --> 00:03:44.515 some would call either digitally native or innovative 00:03:44.515 --> 00:03:45.183 in on their own. 00:03:45.558 --> 00:03:48.895 These are use case-specific companies that 00:03:48.895 --> 00:03:52.857 might be targeting workflow efficiencies in a hospital or 00:03:52.857 --> 00:03:55.568 increased improvement in patient access, 00:03:55.568 --> 00:03:58.279 if you think of some of the remote health or telehealth 00:03:58.279 --> 00:04:00.406 services that provide access in 00:04:00.406 --> 00:04:03.910 communities where patients lack the access that they need to the doctors. 00:04:04.160 --> 00:04:06.996 There's another area, though, that says, there's an awful lot 00:04:06.996 --> 00:04:11.084 of private equity portfolio companies out there—CROs, 00:04:11.084 --> 00:04:14.587 contract manufacturers for medtech companies—where we can 00:04:14.587 --> 00:04:18.633 deploy either technologies to accelerate products and 00:04:18.633 --> 00:04:20.635 therapies to market through R&D, through clinical 00:04:20.635 --> 00:04:24.931 trials, in a way that allows us to reduce the time to market for 00:04:24.931 --> 00:04:25.890 those therapies. 00:04:26.432 --> 00:04:30.937 A lot of advanced technologies are allowing us to focus on 00:04:30.937 --> 00:04:34.023 segments of the market in a way that provide better outcomes of 00:04:34.023 --> 00:04:37.026 some of those therapies that are being deployed. 00:04:37.443 --> 00:04:40.280 And then on the efficiency side in some of these portfolio 00:04:40.280 --> 00:04:44.742 companies, just given the focus on improvements in those health 00:04:44.742 --> 00:04:48.329 care companies within private equity, think of back-end 00:04:48.329 --> 00:04:51.791 functional efficiencies, whether it's in finance, whether it's in 00:04:51.791 --> 00:04:55.044 HR, whether it's in their own IT platforms. 00:04:55.044 --> 00:04:59.007 That is a lot of work there to unlock additional value in those 00:04:59.007 --> 00:05:02.385 portfolios to make them, you know, more affordable for 00:05:02.385 --> 00:05:04.679 patients, drive access for patients. 00:05:04.679 --> 00:05:07.265 So I think there's two different ways to think about technology. 00:05:07.640 --> 00:05:09.225 Bob, always great to talk to you. 00:05:09.350 --> 00:05:10.476 Thank you so much for your time. 00:05:10.476 --> 00:05:10.935 Thanks, Georgie. 00:05:10.935 --> 00:05:11.436 Appreciate it.