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Why Mid-Market Healthcare Still Prints Alpha
It's Wednesday, and we're covering private equity’s dealmaking in mid-market healthcare, share of TTM capital raised in private equity, private credit growth in emerging markets and the structural long-term problem of US trade balance.
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Good morning, ! It's Wednesday, and we're covering private equity’s dealmaking in mid-market healthcare, share of TTM capital raised in private equity, private credit growth in emerging markets and the structural long-term problem of US trade balance.
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DATA DIVE
Mid-Market Healthcare: Still the PE Engine Room
Mid-market healthcare PE is outperforming — and investors are doubling down. Between 2019 and 2024, fundraising for mid-market healthcare funds surged 40%, buoyed by aging demographics, rising chronic disease, and regulatory tailwinds. Deal volume? Up nearly 5x since 2007, with healthcare’s share of US mid-market PE activity holding strong at 12% in 2024. Even exits, which dipped industry-wide, are rebounding: $14.1B in exit value so far in 2024, up from $11.1B last year. Bottom line: mid-market healthcare remains a defensive, scalable, and tech-enabled sweet spot — and LPs know it. (Read or Listen to the Full Report)
TREND OF THE WEEK
Sponsor-to-Sponsor Deals Are Back
After years of relative decline, sponsor-to-sponsor (S2S) deals are regaining ground in European private equity. In 2024, S2S transactions accounted for 31% of PE-backed entries—up from 26% in both 2022 and 2023, and the highest level since 2018.
This rebound comes at the expense of family-to-sponsor deals, which dropped to 53% in 2024, their lowest share in at least seven years. The shift reflects a return of secondary buyouts as a viable path amid stalled IPOs and a sluggish corporate M&A environment.
Carve-outs have held steady at 14%, while public-to-private deals remain marginal, rising slightly to 3%—a sign that volatility and high borrowing costs continue to suppress take-private activity.
The takeaway: Sponsor-to-sponsor deals are no longer a placeholder. They’re becoming the exit plan. As PE firms hold assets longer and look for certainty over splash, recycling quality assets between funds looks increasingly like strategy—not compromise. (More)
PRESENTED BY BOXABL
A New Chapter in Home Construction
What if new-home construction were nearly as easy as opening a book? That’s the story with BOXABL.
How? By using assembly lines to condense homebuilding from 7+ months to hours, BOXABL ships readymade houses to their final destination. Then, they’re unfolded and immediately livable.
They’ve already built 700+. But the real transformation’s still coming.
BOXABL’s currently preparing for Phase 2 – combining modules into larger townhomes, single-family homes, and apartments. And until 6/24, you can join as an investor for just $0.80/share.
They already fully maxed out a $75M investment campaign once, so don’t wait around.
*This is a paid advertisement for Boxabl’s Regulation A offering. Please read the offering circular at https://invest.boxabl.com/#circular
LIQUIDITY CORNER
Returns Back in Double Digits. Sort Of.
Private equity is officially back in the 10% club, with the Big Seven’s median TTM return clocking in at 10% in Q1—modest brag, but still better than most public benchmarks. Even with a slowdown in exit activity, managers are leaning into credit and market dislocation like it’s 2009. Deployment’s up ($23.5B, +17% QoQ), and private credit just casually doubled TTM volume to $546.8B. Still, unless realizations rebound, the party might end early. Carlyle’s YoY exit growth stole the spotlight (thanks, India IPOs), while Apollo flexed with rare QoQ gains. Liquidity? Still elusive, but everyone's pretending it’s NBD. (More)
DEAL OF THE WEEK
Antares and Ares Pull $1.2B Private Credit Liquidity Play
In a first-of-its-kind move for Antares Capital, the firm has closed a $1.2 billion private credit continuation vehicle, led by Ares Management’s credit secondaries funds. The structure allows Antares to roll more than 100 first-lien, floating-rate loans—previously held in two commingled funds—into a new vehicle, providing a liquidity option to existing LPs while onboarding fresh capital.
Continuation funds are becoming standard fare in PE, but their emergence in private credit secondaries is still novel. The deal signals Ares’ growing appetite for scaled credit secondaries and validates Antares’ portfolio in a market where quality origination and underwriting discipline are under heightened scrutiny.
It’s also Ares’ largest credit secondary investment to date—a signal of where dry powder is looking for deployment in a market short on clean exits but long on hold-period extensions.
Why it matters: As traditional exit routes remain jammed, the line between GP-led secondaries in buyout and credit markets continues to blur. Liquidity innovation is no longer just about prolonging asset life—it’s about building platforms that keep capital flowing, even when exits stall. (More)
TOGETHER WITH BOXABL
The Father-Son Duo Revolutionizing Homebuilding
Paolo and Galiano Tiramani founded BOXABL with a disruptive idea: bring factory efficiency to homebuilding. Today, new homes can roll off their assembly lines in ~4 hours – already building 700+. Now, they’re prepping for Phase 2, combining modules into larger townhomes, single-family homes, and apartments. And until 6/24, you can share in their growth.
*This is a paid advertisement for Boxabl’s Regulation A offering. Please read the offering circular at https://invest.boxabl.com/#circular
PRIVATE CREDIT
EM Private Credit: The Smart Risk No One Talks About
Private credit in emerging markets is the financial world’s version of early Amazon stock: ignored, underpriced, and fundamentally misunderstood. EM corporates are showing stronger credit metrics than their developed market cousins — think less leverage, better coverage, and higher yields — yet still wear the risk badge like a scarlet letter. What’s driving the disconnect? Documentation quality is surprisingly robust, thanks to international legal frameworks, while local banks’ lending constraints create a capital gap that only PE sponsors seem willing to bridge. With DM banks retreating, the liquidity-starved EM space may just be the most overlooked source of yield and protection this cycle. (More)
MICROSURVEY
Private equity strategies are being stress-tested by inflationary pressures and uneven demand recovery. Our last microsurvey revealed that Operational Efficiency and Cost Reduction, along with Pricing and Commercial Strategy, are seen as the most important levers for value creation today. In this environment, protecting and expanding EBITDA margins is more critical than ever. We’re interested in where your current focus lies.
Given persistent inflation and uneven demand across sectors, where are you most focused today to protect or expand EBITDA margins? |
MACROVIEW
Don’t Blame Beijing—Blame Comparative Advantage
Blaming China for the U.S. trade deficit is like blaming your ex for your credit card debt—emotionally satisfying, but economically flawed. The U.S. hasn’t posted a trade surplus since 1975, well before China joined the WTO. The real culprit? Structural shifts in America’s economy toward high-cost services and away from manufacturing. As the U.S. outsourced goods and imported capital, China capitalized with scale and specialization. The result: America morphed into the world’s shopper-in-chief, not because it was outsmarted—but because that’s what rich, service-driven economies do. (More)
THIS WEEK IN HISTORY
1790: When Copyright Got Its Founding Father
On May 31, 1790, George Washington signed the first U.S. copyright law, offering 14 years of protection to authors. Founders saw this as nation-building infrastructure, not legal red tape. The result?
A structured market for intellectual property, now a $6.7 trillion asset class globally. Copyright gave birth to modern content economics, from Disney’s moat to Spotify’s model. In private equity terms, it’s the OG “asset-light, royalty-rich” play. Today’s licensing strategies—from pharma patents to media rights—trace back to this inked law. And while copyright battles now involve blockchain, AI, and meme theft, the foundation remains: incentivize creation, secure economic yield. Not bad for 14 pages on parchment.
TWEET OF THE WEEK
Stablecoins are reshaping B2B transactions, and VCs are taking notice.
With global supply skyrocketing to $239B from less than $10B five years ago, startups integrating stablecoins into business models are in the spotlight.
Read @michael_bodley's full coverage here ⬇️
— PitchBook (@PitchBook)
5:14 PM • May 29, 2025
"Dont be afraid to give up the good to go for the great. "
Jonh D. Rockefeller