Overview
At our European Health & Life Sciences Symposium 2026, conversations highlighted a market that remains active and attractive, but is materially more disciplined than in recent years. Across life sciences and healthcare, investors are operating in an environment shaped by valuation resets, constrained capital, higher financing costs, and less predictable exit pathways.
The result is not a retreat from the sector, but a shift in how value is assessed, created, and realised. Private equity remains highly engaged in therapeutics, medical technology, healthcare services and health tech, but the playbook is becoming more selective, more specialised, and more operational.
Read on for the takeaways from our Evolving Private Equity Strategies in Life Sciences & Healthcare” panel, moderated by McDermott Will & Schulte partners Johannes Eckhardt and Fabrice Piollet and bringing together Jean-François Billet, Managing Partner at Mérieux Partners, Edouard de Beaufort, Partner at Capza, Yonel Genin, Partner at Vivalto Partners and Samuel Levy, Co-founding Partner at Lauxera Capital Partners
In Depth
A more selective market
One of the clearest themes from the panel was the increasing bifurbication of the market.
High-quality, differentiated assets continue to attract strong interest and competitive pricing. But beyond that top tier, investors are seeing a much tougher environment, with wider gaps between buyer and seller expectations, longer negotiations, and more pressure on structure.
This is creating a market in which discipline matters more. Rather than chasing broad sector momentum, investors are focusing on businesses that are easier to underwrite, simpler to explain, and more resilient in a volatile environment.
A valuation reset, but not a uniform one
The panel was clear that valuation correction is real, particularly in areas influenced by public market comparables and segments that benefited from unusually strong post-COVID-19 performance.
At the same time, pricing has not reset evenly across the board. Trophy assets still command premium valuations, while less differentiated businesses are facing a much more searching market. This has led to a rise in more flexible structures, downside protection, and tailored solutions to bridge valuation gaps where conviction remains strong.
The takeaway is that the market has not become cheap; it has become more discriminating.
Capital constraints changing the playbook
As fundraising cycles lengthen and liquidity conditions remain tighter, investors are being forced to think more carefully about how they deploy time and capital.
That trend is increasing the focus on portfolio work. The panel underscored that supporting existing investments is not simply about providing follow-on capital. It increasingly means driving strategic change, executing expansion plans and transforming businesses operationally.
Continuation vehicles are also becoming a more established part of the toolkit. But they are far from a universal solution, according to the panel. These vehicles require strong past performance, compelling future upside, a credible exit path and clear GP alignment. In other words, flexibility is increasing, but so is the bar for execution.
Looking beyond crowded trades
Another strong theme was the importance of avoiding the most crowded opportunities.
Rather than competing aggressively for the same high-profile assets, investors are increasingly looking for under-the-radar businesses with strong fundamentals, attractive niche dynamics, and room to scale. That means more proactive sourcing, deeper thematic work and greater emphasis on identifying pockets of growth before they become obvious to the wider market.
Portfolio construction is also becoming more thoughtful. Rather than concentrating exposure around one major theme, investors are seeking diversification across different healthcare segments and different underlying value drivers.
Pragmatism in how AI influences strategy
AI is clearly influencing investment strategy, but the panel took a notably practical view of its impact.
For software and technology-enabled businesses, investors are asking harder questions about defensibility, proprietary value, and whether a product can remain differentiated as horizontal AI platforms become more capable. In some areas, AI is creating genuine disruption risk.
At the same time, the discussion suggested that some of the most resilient assets may be those rooted in physical products, specialist infrastructure and embedded service delivery. Medical devices, critical care services, and technically differentiated manufacturing businesses were all cited as examples of models that may prove more durable.
The panel also emphasised that AI value should not be judged by excitement alone. The most compelling use cases today are often operational rather than glamorous—workflow automation, scheduling, communication and administrative efficiency. What matters is whether AI is useful, trusted, adopted and measurable.
Emphasis on operational value creation
A key message from the session was that private equity in healthcare is becoming more operational by necessity.
Investors are focusing less on financial engineering and more on the levers that can drive sustainable value in a tougher market. These include:
- Strengthening leadership teams for the next stage of growth.
- Using M&A more actively to accelerate scale.
- Paying closer attention to pricing as an underused source of margin improvement.
This focus reflects a broader shift in the market: value creation increasingly depends on hands-on execution rather than multiple expansion alone.
The next phase: Specialisation, execution and defensibility
Looking ahead, the panel pointed to a private equity market that will become even more specialised and execution-led.
Three themes stood out:
- Greater sector and sub-sector specialisation.
- More operational intensity across portfolio companies.
- Stronger interest in businesses that combine real assets, medical know-how and defensible market positions.
The role of AI will continue to grow, but the firms best positioned to succeed will be those that can balance digital opportunity with operational realism.
The next phase of healthcare private equity will be defined less by broad market momentum and more by selective conviction, disciplined execution, and the ability to build value in businesses that can withstand both market pressure and technological change.