20.6% CAGR Ahead—Why Sponsors Are Re-entering Healthtech

Good morning, ! It's Wednesday and we’re covering private equity’s mega-deal momentum, NAV lending’s rise as the new liquidity engine, a €6.4B European banking exit masterclass, and why 2025’s playbook demands macro flexibility. Also inside: private credit’s $3T ascent and the lesson Smoot-Hawley still teaches today.

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DATA DIVE

Healthtech’s $1.25T Moment: Why PE Is Reentering the Market

Healthtech is regaining its footing—and private equity is watching closely. After peaking at $51B across 1,326 deals in 2021, PE/VC activity in the space fell sharply, hitting just $2.9B across 164 deals YTD 2025. But behind the volume drop lies a fundamental reset: valuations have stabilized, targets are more mature, and investor discipline is back in vogue.

What hasn’t changed is the growth trajectory. The Healthtech market is projected to grow from $507.3B in 2024 to $1.25T by 2029, a CAGR of 20.6%, outpacing nearly every other healthcare vertical. Venture capital’s renewed confidence—$25.2B in 2024, ahead of Robotics and Semiconductors—provides a downstream signal for PE firms hungry for roll-up strategies and vertical platform plays.

As governments streamline digital reimbursement and provider networks modernize, the next wave of platform investing is likely to center around clinical workflow, data interoperability, and AI diagnostics. Add in cross-border scalability and a bifurcated exit environment (IPO or strategic), and the signal is clear: Healthtech isn’t just a tech play—it’s infrastructure.

Bottom line: With multiples compressed and structural demand surging, the next Healthtech cycle may reward those deploying now, not chasing later.

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TREND OF THE WEEK

M&A Rebound or Just a Mega-deal Mirage?

After a long lull, Mega-deals are on the move. Since 1H23, global $1B+ M&A activity is showing clear signs of a rebound—deal values have climbed nearly 19% in the past year. The backdrop? Top PE funds flush with fresh capital and corporates armed with strong stock currencies. In 2024, more than 500 deals topped the $1B mark—up from 430 in 2023—pushing average deal size to $146M (+11%). Yet this is a top-heavy market: small-to-mid-sized deals remain stuck, hampered by valuation gaps and volatility (hello, VIX at 26.5). 

Bottom line: we’re in a Mega-deal launch phase, not a broad-based recovery. If you’re not thinking big, you may be missing the window. (More)

TOGETHER WITH GELT

When a 9-Figure Exit Almost Fell Apart—How Smarter Tax Strategy Saved Millions Before Close

One of our clients, a managing partner at a mid-market PE firm, was weeks from closing a 9-figure exit. LOI signed, diligence smooth—but then a $7M tax surprise surfaced tied to equity comp and earnout structure. Their CPA panicked. We stepped in, restructured the deal using 1202 stacking and charitable trusts, and saved the partners millions—without delaying close.

This is what we do. Gelt is the tax firm built for private equity professionals, M&A leaders, and corporate finance execs. We help you anticipate landmines and engineer better outcomes—whether it's carry optimization, fund structuring, or navigating an exit.

Now is the time to get ahead. Don’t go into Q3 with the wrong CPA. If you switch to Gelt before July 4th, we’ll take 10% off your first year of service. Close stronger, earn smarter, and never leave money on the table again.

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LIQUIDITY CORNER

NAV Lending: The New Liquidity Backbone

In a market where IPOs are scarce and M&A exits drag, NAV lending has become private equity’s go-to cash tool. Funds are borrowing against the net asset value of their portfolios—because waiting on LP capital or selling at a discount just isn’t it. New data from Maples Group shows a preference for longer-dated NAV deals, with 65% exceeding two years in tenor. The 2–3 year bucket leads at 29%, while shorter durations remain a rarity. Unlike subscription lines, which skew short-term, NAV lending supports delayed exits, follow-ons, and continuation vehicles. Useful? Definitely. But overreliance risks turning liquidity into leverage—fast. (More)

DEAL OF THE WEEK

Lone Star’s €6.4B Exit from Portugal’s Novo Banco

Lone Star is set to offload its 75% stake in Novo Banco to France’s BPCE for an enterprise value of €6.4 billion, marking one of the largest European bank takeovers in recent years. The U.S. firm acquired the distressed Portuguese lender in 2017 for just €1 billion—a bold contrarian bet now delivering a robust return.

Novo Banco emerged from the ashes of Banco Espírito Santo and has since undergone a deep operational overhaul under Lone Star’s ownership: non-performing loans reduced to negligible levels, digital infrastructure modernized, and a return to profitability. Today, it’s the fourth-largest bank in Portugal, with €17B in corporate loans and 1.7 million customers.

For BPCE, the deal is both a geographic and strategic expansion. Upon closing, Portugal will become its second-largest retail market, giving the French group broader EU banking reach and potential cost synergies across fintech, credit, and compliance.

Why it matters: This is a textbook example of PE-led banking turnaround—and a reminder that in heavily regulated, asset-heavy sectors, transformation plays can still yield outsized exits. (More)

PRIVATE CREDIT

Private Credit: Where Yield Meets Stability

Private credit has grown into a $3 trillion juggernaut, outpacing traditional fixed income and giving public equities a run for their volatility-adjusted money. As of March 2025, direct lending serves up a mouth-watering 11% yield, dwarfing US Treasuries (4.1%) and IG corporate bonds (5.2%). The secret sauce? Bespoke deals, locked-up capital, and freedom from banks’ regulatory shackles.

Historical returns tell a similar story: where the S&P 500 dances between boom and bust, private credit stays steady in the 8-12% range. Investors—especially pensions and insurers—are piling in, with capital deployment jumping 64% YoY.

Bottom line: For those tired of low yields and high drama, private credit is the adult in the room. (More)

MICROSURVEY

MACROVIEW

Deal Pipelines Meet the Macroeconomic Blender

Whether we’re heading for a Soft Landing, No Landing, or Recession, one thing is certain: 2025’s dealmaking playbook requires flexibility. The US economy’s surface strength belies pockets of strain, with 45.5% of PE sponsors already spotting recessionary signals. A Soft Landing supports steady deal flow (think healthcare, software), while No Landing pushes sponsors into defensive mode and banks toward private credit. The Recession scenario? Expect distressed deals, creative structures, and falling valuations. The kicker: divergence reigns—bankers, sponsors, and corporate teams all see different futures. In this environment, smart sponsors will stress-test across all scenarios, balancing sector bets and financing approaches. Because the only macro certainty right now is... uncertainty. (More)

THIS WEEK IN HISTORY

The Tariff That Tanked the World

June 17, 1930: President Herbert Hoover signed the Smoot-Hawley Tariff Act, jacking up duties on 20,000+ imports. The goal? Shield U.S. farmers and manufacturers. The result? An international trade war that crushed global commerce. U.S. exports collapsed by 60%, and global trade shrank 66% by 1934. Instead of a buffer against the Depression, the tariff poured gasoline on it. The lesson: In a connected world, protectionism protects no one—least of all the ones doing the protecting. (More)

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TWEET OF THE WEEK

"The secret of change is to focus all of your energy not on fighting the old but on building the new"

Socrates