Morning Hubsters,
Happy Fri-yay! John R Fischer here with the US Wire from the New York newsroom.
While I usually look at a deal for Friday Focus, today it’s a theme: sustainability, the focus of this week’s instalment of the Private Markets 2030 series. To learn about its role in future investments, PEI Group editorial teams spoke with up-and-coming talent in its under-40 lists, including rising stars from Infranode and Clifford Chance. We’ve got their predictions below.
Next, I’ll highlight investments from my six-deal listicle on the home healthcare sector. The segment’s growth potential has attracted PE firms such as Ardian, Frontline Healthcare Partners and Waud Capital.
We’re finishing with due diligence tips from law firm Debevoise & Plimpton’s Andrew Bab and Kim Le. The duo spoke with affiliate title Private Funds CFO about new PE-focused healthcare laws in California and what it could mean for other states.
Friday Focus
The sustainability ecosystem in private markets has grown quickly in recent years, writes Louise Fordham, PEI Group’s senior special projects editor, in our Private Markets 2030 series. Driving this momentum is an influx of regulation, industry collaboration, investor demand and end-user expectations, as well as widespread acceptance that robust sustainability priorities and frameworks can add value and mitigate risk.
While ESG efforts have faced some political headwinds of late, private capital continues to invest behind sustainability themes, including pressing issues such as the energy transition and climate adaptation and mitigation.
As part of our Private Markets 2030 series – a deep dive into the trends shaping alternatives over the rest of the decade – we asked up-and-coming talent from PEI Group’s under-40 lists what sustainability and impact trends they think will gain traction over the next five years. This includes individuals that have previously featured in Private Debt Investor’s Rising Stars program, Infrastructure Investor’s Rising Stars cohort and Private Equity International’s 40 under 40: Future Leaders of Private Equity initiative – lists that highlight younger professionals who are themselves expected to help shape the future of their asset classes and the alternatives industry more broadly in the years ahead. Here are two of these excerpts.
“Over the next five years, four sustainability areas are expected to gain traction in private markets: continued interest in flexible energy solutions and storage to balance power system volatility; opportunities related to data centers, including recovery of excess heat; low-carbon gases such as biogas, and targeted applications of hydrogen, offering reliable, dispatchable decarbonization options compatible to replace fossil-gas technologies; and resilience investments, including climate change adaptation measures.”
— Julia Holm Kosulko, head of sustainability at Infranode and an Infrastructure Investor Rising Star 2024
“As electricity demand continues to surge, I’d expect a stronger focus on grid infrastructure investment over the next five years – this will be key for allowing renewable energy to satisfy an increasing share of this demand. We have also been seeing more investment strategies focused on climate change adaptation and resilience, often incorporating nature-based solutions as well as hard infrastructure.”
— Lily Marcel, partner at Clifford Chance and a PEI 40 under 40: Future Leader of Private Equity 2024
Home checkups
The global home healthcare market is on the up, projected to grow from $309.9 billion in 2025 to $473.8 billion in 2030 at a CAGR of 8.9 percent, according to Research and Markets‘ Home Healthcare Market Research Report 2025-2030.
This growth and stability are among the key drivers of PE investments in the sector, which is also a cost-effective alternative to long-term care. Home healthcare is drawing strong demand from an aging population and aligns with growing trends around shifting care out of the hospital into outpatient settings.
Technological advancements such as telehealth and remote patient monitoring are making it easier to provide care at home, where patients may feel more comfortable, creating a value-based incentive that is driving demand and, in turn, has piqued PE’s interest.
“Payors are actively steering patients toward home-based care because it delivers meaningfully better outcomes at lower costs compared to institutional alternatives, and health systems facing capacity constraints view home healthcare as a crucial extension of their care continuum,” Dennis Smith, partner at Frontline Healthcare Partners, told PE Hub.
He continued: “What makes this particularly attractive from an investment perspective is that we’re still in the early innings of this transition. The infrastructure to deliver high-quality, technology-enabled care at scale in the home is still being built, creating significant opportunities for well-capitalized operators to expand both organically and through acquisition.”
I rounded up six deals from the last seven months in the sector. Here are two:
In October, Frontline Healthcare Partners announced the acquisition of Integracare, a Canadian private home healthcare company.
Integracare has offices in midtown Toronto, Mississauga and Ottawa, out of which it provides private nursing and healthcare services for people in their homes.
“Demographic shifts are fundamentally reshaping care delivery as an aging population with increasingly complex care needs is driving explosive demand for home-based services, while patients universally prefer receiving care in their homes versus institutional settings,” Smith told PE Hub.
The company is the sixth portfolio investment for Frontline, which plans to help it continue to grow via M&A and organically.
In July, Ardian announced the acquisition of Horizon Home Care Group, an international provider of non-medical home healthcare services operating under the name Dovida. The sellers are previous majority shareholder and company founder Paul Fritz, asset manager Unigestion, and Swiss family office Verium.
Based in Rheinfelden, Switzerland, the company provides companion care, home help, basic care, overnight assistance, dementia care and support for palliative situations and caregiving relatives. It employs approximately 12,000 individuals.
Fritz, who will remain as CEO, will reinvest alongside Verium. Dovida’s management will also hold a stake in the company.
Snowball Effect
Sticking with healthcare to finish. In early October, California governor Gavin Newsom signed two separate bills that widen regulators’ powers over private fund-backed healthcare mergers and acquisitions and private fund-backed healthcare companies. They take effect in the New Year.
AB 1415 widens the scope of the Office of Health Care Affordability’s power to review proposed healthcare mergers by defining private funds and private fund-backed managed services organizations as “noticing entities,” requiring fund managers to answer questions about the costs and impacts of a proposed healthcare deal. SB 351 gives the Golden State’s attorney general authority to sue PE or hedge fund managers who interfere with medical decisions in the doctors’ and dentists’ practices in which they invest.
To learn more, Bill Myers, a regulatory reporter and DC correspondent for Private Funds CFO, spoke with Andrew Bab, partner, and Kim Le, counsel, for Debevoise & Plimpton.
“I think the bigger issue, honestly, for private equity is that when they see we’ve gone through, what, six or seven different bills like this over a period of five years?” said Bab. “If you want to hold your investment for three to five years, what’s the next law that’s going to come out, and how is it going to affect your exit, or affect the ability to grow the business?
He added that with these laws, he feels a “kind of snowballing effect in California in particular, but also across the country,” and that “people will need to think more carefully about how they write their management services agreements, so that they kiss the statute and don’t go overboard. Because there are new ways to enforce those now.”
Le advises that PE firms map out which states their businesses operate in or will and track antitrust rules and regulations there. “You need to identify all the state statutes that could be implicated by your transaction and build a timeline for the required filings and notice.”
Read the full story to learn more about the laws and Bab and Le’s tips for navigating them.
Well, that’s it for me. As always, if you have any questions, comments or want to chat, drop me an email at [email protected].
Nina Lindholm will be back on Monday with the Europe Wire, while MK Flynn will be in the US chair.
Cheers,
John
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