The McGuireWoods Healthcare Private Equity and Finance Conference brings together leading investors, operators and advisers to explore trends shaping the healthcare dealmaking landscape. With a focus on actionable insights and relationship building, the conference serves as a forum for stakeholders navigating the intersection of healthcare and private equity.
This article series tied to the 21st annual conference — held May 14-15, 2025 — spotlights key sectors and themes influencing investment strategies and operational priorities across the healthcare continuum. This installment focuses on strategic insights from senior lending executives working for institutional and direct lenders in the healthcare space. Panel discussions offered a snapshot of what industry leaders see in the market and what initiatives investors can take to succeed in the current risk-averse lending environment.
Despite Slow Start to 2025, Deal Flow Momentum Expected to Build
The initial outlook for 2025 was broadly optimistic, but the first half of the year unfolded at a slower pace than many in the finance community anticipated. Deal activity this year primarily consisted of refinancings for strong, existing borrowers and add-on acquisitions to established platforms.
Panelists noted that elevated interest rates and ongoing uncertainty surrounding tariff policies caused borrowers to reevaluate their immediate need for new committed financings. Market conditions made it difficult for potential borrowers to produce reliable budgets and financial forecasts, which made it increasingly difficult for financial institutions to underwrite new opportunities with confidence. As a result, bankers and other investors became more selective in financing, as credit committees started to apply a heightened sense of scrutiny. A more cautious approach led to a notable buildup of capital on the sidelines in the debt and equity markets as borrowers and potential investors wait for more favorable conditions.
Despite the sluggish start to 2025, expectations remain high for a stronger second half of the year. Interest rates are anticipated to decline later this year, which panelists noted is likely to unlock a wave of sponsor-backed M&A activity and an increased demand for capital. The tone at the conference remained optimistic that an ease to borrower costs will drive an acceleration in deal flow over the coming months.
Proactive Engagement Drives Stronger Credit Outcomes Amid Cautious Market
Despite a more cautious and selective lending environment, certain financial institutions managed to maintain a steady deal flow by engaging proactively with clients and potential borrowers. Investors that maintain open lines of communication and stay closely aligned with borrowers’ management teams are better positioned to structure and execute transactions as they become available. A relationship-driven approach is critical in retaining business and winning new deals. Companies expect their financial partners to deliver flexible, tailored solutions that align with their business needs, and the panelists noted that an investor’s ability to listen to and address client needs is a determinative factor in a financial institution’s success in today’s competitive market.
Discussion Highlights Strengths of Private Credit and Institutional Lenders
Panel discussions around private credit versus institutional lenders underscored that financing sources offer distinct advantages, depending on the needs of the borrower. Private credit was praised for its flexibility, speed and ability to tailor solutions, particularly in the lower and middle markets. Institutional lenders, on the other hand, continue to stand out for their scale, breadth of services and lower cost of capital.
While private credit gained momentum in 2024/2025, institutional lenders remain competitive by offering comprehensive treasury support products, reliable capital sources and relative lower cost of capital. The consensus was clear: There is no one-size-fits-all solution. Each capital source brings valuable tools to the table that any potential borrower should consider.
Shift in Healthcare Verticals: Momentum in Behavioral and Home Health
Healthcare finance continues to experience a strategic realignment, with capital moving away from some traditional sectors due to operational complexity, real estate risks and regulatory headwinds. Meanwhile, behavioral health and home health transactions are gaining traction, as panelists noted that companies in these sectors often are fueled by increasing demand, scalable care models and alignment with alternative payer strategies. These sectors are emerging as focal points for private equity and credit investors seeking resilient, growth-oriented opportunities.
To that end, financial institutions also are paying close attention to companies that are effectively leveraging artificial intelligence to meet the evolving needs of today’s patients. Investors have become focused on companies’ abilities to implement AI that offers predictive analytics, patient engagement and operational automation. These capabilities are becoming key differentiators in a competitive and rapidly evolving healthcare landscape, and investors favor healthcare platforms with embedded AI capabilities for competitive advantage and scalability.
As the healthcare private equity space continues to evolve, investors and operators must stay agile. This year’s conference underscored the increasing need to offer personalized financial products for healthcare providers as they navigate a volatile and cautious financial market.McGuireWoods monitors these developments and advises clients on how best to navigate the changing landscape. The next installment in this series will explore life sciences and what it means for private equity in healthcare.
Thanks to everyone who attended, shared insights and participated in this year’s conference. McGuireWoods looks forward to continuing this dialogue. We hope to see you at our upcoming events, including the following. For more information on registration, contact [email protected].
- Bloom and Build – Chicago, IL, June 18, 2025
- Join McGuireWoods’ women in private equity, finance and healthcare for a flower-arranging workshop and networking event.
- Healthcare Growth & Operations Conference – Charlotte, NC, Sept. 16-17, 2025
- Independent Sponsor Conference – Dallas, TX, Oct. 14-15, 2025
- Healthcare Private Equity Pop-Up – Denver, CO, more information coming soon
- 22nd Annual Healthcare Private Equity and Finance Conference, April 29-30, 2026
Articles in this series can be found on the conference website under the “Key Takeaways” section.