Matt Wolf

They no longer want to invest in companies that take direct reimbursement risk. They don't want physician practices. They don't want hospitals. They don't want senior care. They want to put their money to work into health technology that will help support those businesses or suppliers that will help support those businesses or other sort of kind of a pick and shovel sort of play.

They're committed to health care, but they're leaving the services business. They don't want that reimbursement risk. And so as the as the potential buyers leave, of these healthcare providers that need to flip to a new PE as that pool of buyers sort of shrinks.

They're committed to health care, but they're leaving the services business. They don't want that reimbursement risk. And so as the as the potential buyers leave, of these healthcare providers that need to flip to a new PE as that pool of buyers sort of shrinks.

I think we might continue to see this bid ask spread delta, at least in healthcare services that will sort of maintain even if it shrinks in other areas of healthcare.

I think we might continue to see this bid ask spread delta, at least in healthcare services that will sort of maintain even if it shrinks in other areas of healthcare.

Yeah, absolutely. And I think we've talked about it on this podcast before, but it's really interesting. It kind of swings like a pendulum. You know, 10, 15 years ago, most sponsors stayed far away from reimbursement risk due to all of the operational regulatory challenges that you alluded to.

Yeah, absolutely. And I think we've talked about it on this podcast before, but it's really interesting. It kind of swings like a pendulum. You know, 10, 15 years ago, most sponsors stayed far away from reimbursement risk due to all of the operational regulatory challenges that you alluded to.

But then over the prior economic cycle, as interest rates were very low and money was easy to come by, there were a lot of sponsors who started to kind of dip their toes or even get even more serious about the space. And they were able to make a lot of money doing so.

But then over the prior economic cycle, as interest rates were very low and money was easy to come by, there were a lot of sponsors who started to kind of dip their toes or even get even more serious about the space. And they were able to make a lot of money doing so.

now that we're in this new regime of higher interest rates, positive real interest rates, we're seeing the tide sort of recede again, as some of those sponsors say, you know what, this just is not a focus of ours anymore, and so we're leaving.

now that we're in this new regime of higher interest rates, positive real interest rates, we're seeing the tide sort of recede again, as some of those sponsors say, you know what, this just is not a focus of ours anymore, and so we're leaving.

And that, I think, will continue to vex sellers, but I do think it's an opportunity for buyers who remain committed to accepting that reimbursement risk, right? The competition for these deals is, is declining in many spaces.

And that, I think, will continue to vex sellers, but I do think it's an opportunity for buyers who remain committed to accepting that reimbursement risk, right? The competition for these deals is, is declining in many spaces.

And so if your shop is good at diligence, good at the operations around these practice management or other businesses that accept reimbursement risk, I think there'll be a lot of hay to be made in 2025. I think that it actually benefits some of those shops. So we'll see how it all plays out. But

And so if your shop is good at diligence, good at the operations around these practice management or other businesses that accept reimbursement risk, I think there'll be a lot of hay to be made in 2025. I think that it actually benefits some of those shops. So we'll see how it all plays out. But

And certainly the uncertainty and challenges of the regulatory environment and reimbursement risk, those are only going to grow over time. It's not going to become a simpler business. It's only going to get more complex. But I do think that creates opportunities for the sponsors that are going to focus on the area.

And certainly the uncertainty and challenges of the regulatory environment and reimbursement risk, those are only going to grow over time. It's not going to become a simpler business. It's only going to get more complex. But I do think that creates opportunities for the sponsors that are going to focus on the area.

Yeah, busy. It is very busy. we're getting a lot more requests for sort of more limited diligence at earlier stages of the process. And I think this is coming from sponsors want to

Yeah, busy. It is very busy. we're getting a lot more requests for sort of more limited diligence at earlier stages of the process. And I think this is coming from sponsors want to

spend they're going to spend more time and more money looking at deals to make sure that they're making the right deals you know i think a lot of the the sponsors we talk about they're expecting to look at more deals in 2025 but probably close about as many as they did last year hopefully more but they're not um you know they're very much internalizing the mantra of you know it's always a good deal to walk away from a bad one and they're they're very concerned about um