Steven Richards
speaker
44 appearances
1 recordings
1 series
first heard Mar 2025
last heard Mar 2025
Steven Richards’s voice in public audio — every appearance, attributed to the second.
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Appearances
Thank you for the kind words, Scott. It's nice to be with you today. First and foremost, I want to thank you for the opportunity. You've done so much for the healthcare industry, broadly speaking, so it's a pleasure to be here with you today. I don't know if the Hoosiers are ever going to come back to prominence, but we are waiting with bated breath now that we have a new basketball coach.
We kind of became a football school this year, right? So we'll see how things go.
sort of slowed down to a pace that no one was really used to and it was uncomfortable for most. And amidst an increasing interest rate environment or unfavorable interest rate environment, we saw hold periods that have extended to record highs and record lows with return capital to LPs. And I think what we had all hoped
after 2024, where we did see an uptick across deal value and volumes, generally speaking, we thought that 2025 was going to come off to a faster start. So I think we've really kind of not had the start that we'd hoped for in 2025. And I think there's a few reasons for that.
You know, there's some policy changes that are abound in Washington, and that's creating some uncertainty, whether it be with tariffs or reimbursement policy and things of that nature that are just causing some pause. We've also had more regulatory oversight
with private equity involvement into provider services businesses and we've had much more regulatory oversight at the state level so there's been a lot of dust that has needed to settle and i think a lot of that did happen last year and now i think what we're seeing is we're dealing with some uncertainty with with tariffs and you know cost of capital inflation and really what that's causing is
more of a flight to quality. And the A plus assets are trading and folks are paying out the nose for those assets. But that's setting some unrealistic expectations for the B plus assets because the bid ask spread remains very wide.
And so when you have unrealistic expectations, what happens is the deals kind of pull to the right, the deals get extended or timelines get extended, sometimes fail altogether. And I think that Many times, whether you're an entrepreneur or you're a private equity seller, nobody wants to be the guinea pig and run the risk of a failed process or the well being poisoned, so to speak.
So you see really a slowdown. And if you're not ready to bring an A-plus asset out to market, I think that a lot of folks have elected to look to the continuation vehicle as an option or just hold for longer periods.
That's always a concern for me. And I think that in some cases, it's a strategy for buyers to hold very firm on their bids and in the hopes that the deal will come back to them. And once it does, the perception is, well, you've got a busted process and
we're going to now sharpen our elbows during diligence, find more than what we likely would have originally, and use that as an opportunity to retrade down. So ultimately, I think it leads to leakage of value in most cases, not all cases. There's been many processes that I've been a part of in the past where we elected to pull
the asset out of market because we knew that we had an inflection point, you know, a big contract or some opportunities where we really hit some tailwinds. And we wanted to get a little bit more time in the rear view mirror so that we would get full credit on a run rate basis for that growth.
So it depends on the circumstances, certainly, but I think in an environment where there is uncertainty, the perception is generally going to be that there was something wrong. And yeah, Once you go out to market and you got to go back to the same universe, I think it just presents opportunities to have a less than ideal outcome when it's all said and done.
We're seeing a ton of activity in... pharma and pharma services. I think the outsourced services spend compressed a little bit in the last couple of years with funding kind of being pulled back, but I think we're seeing some uptick in funding into the biotechs, and that's creating an uptick in the broader pharma services landscape.
We're also seeing a much higher need for clinical IT infrastructure, data and analytics. With growing trial complexity, there's a need to accelerate cycle times, increase productivity. and overall reduce the trial timeline, which then improves access to therapies. And the faster you can get to market, the better advantage that you have. And so I think
IT infrastructure and analytics are supporting that. We've seen a big uptick in specialty pharmacy and in home infusion with an aging population, chronic disease prevalence increasing. And in these chronic disease states that are often recurring patients or even lifetime patients,
There's been a really good business model that you can build around specialty pharmacy, which used to have really thin margins. But whether it's autoimmune, neuro, oncology, gastro, rheumatology, dermatology, I think what you're seeing is those that can create a sticky relationship either with the health systems or with the patients or with the drug manufacturers.
And then you throw a little bit of technology enablement for the case management, clinical management, analytics, etc., You're seeing really, really high outlier type valuations in specialty pharmacy slash home infusion. We've also seen a resurgence in healthcare IT. I come from the health system world myself, so I'm all too familiar with the financial pressures that
operators are facing and shifting reimbursement, wage inflation. You know, if you were to draw a baseline or develop a baseline forecast for a health system, it would look like a falling knife. And so every year, Hospital boards have to figure out where they're going to find improvement.
And I think healthcare IT is a really good place to improve workflow management, improve revenue cycle, disintermediate cost, improve quality, improve access, all those things that kind of create those sticky revenue streams. So those would be some of the areas that I think are really, really hot right now. Market access also being one of those in the pharma services side of things.
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