Blog | 3/18/2025

Takeaways and Reactions from McDermott HPE Miami 2025 Conference

Partners Greg Chittim and Mike Davitian attended HPE Miami in March 2025.

Private equity deal makers are eager to put their capital to work and forge new deals, driven by the availability of capital, promising recent deals, and signs that an increasing number of assets are likely to come to market. However, they face several roadblocks, including the ongoing challenge of the bid-ask spread and the impact of new and sometimes unpredictable economic and regulatory policies. On balance, the outlook remains cautiously optimistic. In this article, we will summarize the insights gleaned by Michael Davitian and Greg Chittim, Partners at Health Advances and leaders in our investor support practice, during the recent McDermott HPE conference in Miami.

There is Capital to Deploy

Fundraising for healthcare private equity firms has been mixed, but several healthcare-focused private equity firms have successfully raised new and large funds in the last year. What has changed is the number of funds that closed: fundraising has been concentrated into the hands of fewer managers with ever-larger funds to invest. Nonetheless, P/E funds are not lacking for capital: In 2022-2024, healthcare-focused P/Es have raised about $50B (assuming fundraising through Q3 2024 is representative) which they will have to put to work. Unsurprisingly, conference attendees at McDermott HPE indicated that there was significant dry powder available to deploy.

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Deal-Makers are Cautiously Optimistic; Policy Outlook Is a Wildcard

Deal-making has shown some positive signs recently with big exits by BioVectra (acquired by Agilent for $925MM in July 2024) and ModMed (acquired by Clearlake Capital in March 2025). Conference attendees anticipated moderate increases in deal-making activity relative to the last 6-12 months but with uncertainty through Q2 2025, based on a live poll conducted during the conference and conversations we had with investment bankers and private equity investors on the sidelines of the event.

We may see a larger number of companies coming to market than we’ve seen in recent quarters - several investment bankers shared that they have multiple companies that are in preparatory phases for sale processes. Some processes that failed in the last 12-24 months may return as companies meet performance marks that buyers were looking for to justify the valuations that sellers were seeking. Broken deals are less stigmatized in this environment, meaning it’s more possible for companies to return to the market with some additional time to validate their strategy and/or to strengthen their financials. Demonstrating the ability to take feedback from potential investors, improve operations, pivot strategy, and drive market outcomes can build confidence among future board members. 

The bid-ask spread presents an ongoing challenge; however, it is gradually narrowing as sellers adjust their expectations. Additionally, the passage of time has allowed portfolio companies to mature and justify the valuations sought by sellers.
Some policies from the Trump administration and uneven, unpredictable implementation of those policies pose challenges. 

  • Tariffs were a key concern for many stakeholders at the event, largely due to their effects on inflation and interest rates. 
  • Proposed CMS cuts and changes to the individual market might reduce coverage for healthcare products, especially in lower acuity settings. One conference speaker noted that, “If you squeeze the balloon on one end, it’s going to blow up the other side,” meaning that cuts to Medicaid may result in people losing insurance and seeking charitable care in the emergency rooms of already-stretched hospitals. 
  • FDA staffing cuts add uncertainty to drug and device approval processes, which affects a variety of adjacent biopharma and medtech services businesses, such as CDMOs and commercial software and services. Many conference attendees are hopeful that the flurry of policy changes will subside over the next quarter or two as the new administration settles in, providing more clarity around the regulatory and policy environment.

Given the regulatory/policy uncertainty and the relatively large number of broken deal processes over the last year or two, sellers are likely to place a greater emphasis on deal certainty and the ability to close. Buyers who have done their homework and can demonstrate broad support from their investment committees are well-positioned. 

Overall Takeaways

  • Competition for high-quality assets will remain high. Buyers can distinguish themselves by demonstrating strong internal support for their valuation and bids that are informed by consistent, early engagement and strong market and competitive knowledge. 

  • Interest remains high in high tech and operational cost savings sectors of healthcare – AI, digital health, health IT, and pharma services were at the top of every panel’s list for areas they’re digging into.

  • Regulatory and policy uncertainty will create a hurry-up-and-wait environment. Smart investors looking to sell or buy in 2025 will invest in market studies and outside-in commercial diligence now, and plan for quick refreshes when the environment warrants or requires teams to move fast. 

  • Tracking federal and state policy shifts is hard – Health Advances has a weekly “Trump Administration News” newsletter on LinkedIn to help share objective, non-partisan updates. Subscribe here. 

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Michael Davitian is a Partner and leader in our biopharma, biopharma services and investor support practices.
Greg Chittim is a Partner and leader in our digital health, HCIT and investor support practices.

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