A Bright Spot In Today's Dark Economy

It’s hard to find strong growth sectors with all that’s wrong in the economy, but the good news is all hope is not lost. As many experts predicted, the healthcare industry remains relatively strong. In fact, although more than 2.5 million jobs were lost in 2008, healthcare was the exception; jobs were actually created in the sector.

In addition, President Barack Obama’s $787 billion package has earmarked almost $90 billion for healthcare spending. The idea is to provide more healthcare, modernize technology and make the overall system more efficient. The big question is how will this happen? Regardless of how this happens, however, the attention should be good news to private equity firms. Or more specifically private equity firms that either own healthcare-related companies or are in position to invest in the sector.

There’s no doubt that healthcare is poised to see growth. It is one of the few sectors that's immune to macroeconomic ills that weigh on the rest of the market. And obviously private equity investors are taking note. American HealthCare Capital, an advisory firm, says it was able to complete each and every transaction it had on the calendar last year with a whopping 16 healthcare transactions closing in the final quarter of 2008. Additionally, the firm already has more deals scheduled to close in the first quarter of 2009.

On that note, I am curious to hear where you think the best healthcare investment opportunities may lie? I hear a lot of talk about pharma spending and innovative nutrition companies, as well as continued interest in nursing and home care facilities. But which areas in particular stand to gain from the infusion of the stimulus bill, and will it actually translate into opportunity for private equity investors?

I want to hear what you think. Please email. Look forward to hearing from you.

Danielle Fugazy
Danielle.fugazy@sourcemedia.com