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Pharma PE Is Still Waiting for the Floor
Healthcare dealmaking slows, AI rewrites underwriting, and investor competition keeps rising.
Santiago Morazzani
September 01, 2026
Good morning, ! Healthcare PE isn’t short on capital—it’s short on easy deals.
Pharma services activity is still searching for a floor, AI is forcing investors to rethink the healthcare IT playbook, and more PE funds are competing for a smaller pool of clearly underwritable assets.
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DATA DIVE
Pharma Services: PE Is Still Waiting for the Floor
The post-pandemic reset in pharma services is proving longer than expected. After peaking at 441 PE deals and $59.9B in deal value in 2021, activity has steadily normalized. By 2025, deal count had fallen to 189, while disclosed deal value declined to $34.3B.
2026 is shaping up to be another quiet year. PitchBook data shows 80 deals completed so far, with 127 estimated for the full year—roughly 33% below 2025 and more than 70% below the 2021 peak. Deal value currently stands at just $11.7B.
The slowdown does not necessarily undermine the long-term pharma services thesis. Rather, it points to a more selective PE market after years of elevated valuations and abundant capital.
Why it matters: With dealmaking still searching for a floor, investors have less room to rely on sector-wide multiple expansion. The next cycle will favor differentiated platforms with durable pharma exposure, strong revenue visibility, and a credible operational value-creation story.
HEALTHTECH CORNER
AI Is Rewriting the Healthcare IT Investment Playbook
AI disruption is moving from the product roadmap to the investment committee.
Bain reports that the AI-driven “SaaSpocalypse” muted healthcare IT deal activity in H1 2026. While deal volume remained roughly in line with H1 2025, investors grew more cautious on valuations and showed greater appetite for businesses with clear AI-enabled transformation theses, particularly tech-enabled services. Bain’s Healthcare Private Equity 2026 Midyear Update
But disruption won’t hit every subsector equally. Bain separates AI exposure into augmentation, transformation, and revolution. Provider clinics sit largely on the augmentation side, while areas of healthcare IT face much deeper disruption. Revenue cycle management (RCM) stands out, with some use cases potentially requiring fundamental reinvention rather than incremental automation.
The bottom line: For healthtech investors, AI is becoming a new underwriting variable. The key question is no longer whether an asset uses AI, but whether AI strengthens its margins and moat—or erodes the value of what it sells. In that environment, growth and multiple arbitrage alone may no longer carry the investment case.
You’re invited: Where AI Meets Private Equity
Artificial intelligence has moved beyond experimentation. The real question for private equity firms is no longer whether to adopt AI, but how to turn it into measurable value across the investment lifecycle.
On November 18, PE150 and CapLink Group will host the AI / Data & Insight Private Capital Breakfast, an invitation-only gathering at London's May Fair Hotel that will bring together operating partners, deal teams, portfolio executives, and technology leaders to discuss what AI adoption actually looks like inside private equity.
The morning will feature three practitioner-led discussions:
AI Into Value Creation — How leading firms are transforming AI from dashboards into repeatable value creation playbooks across portfolio companies.
AI Across the Investment Lifecycle — Practical applications spanning sourcing, due diligence, investment decisions, and portfolio management.
Building the AI-Enabled Private Equity Firm — The operating models, data strategies, and organizational capabilities required to scale AI successfully.
Interested in attending? Register or request the full agenda here.
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TREND TO WATCH
Healthcare PE Isn’t Retreating—It’s Getting More Selective
Healthcare PE entered 2026 with a paradox: less capital transacted, but more investors at the table.
Global healthcare buyout value declined in H1 2026 versus H1 2025, even as deal volume edged higher amid AI disruption, geopolitical uncertainty, and stress in private credit markets. Yet investor participation moved in the opposite direction: 415 healthcare PE funds participated in a deal in H1 2026, up 25% from 331 a year earlier, according to Bain. Bain’s Healthcare Private Equity 2026 Midyear Update
The divergence points to a market that is more crowded but harder to underwrite. North American buyout value increased, while Europe saw disclosed value fall meaningfully. Meanwhile, investors gravitated toward assets with clearer transformation and value-creation theses, as traditional reliance on revenue growth and multiple expansion becomes less dependable.
The bottom line: Healthcare PE appetite remains robust—the bar has simply moved higher. With dry powder still abundant and LP pressure to return capital building, competition for high-quality, operationally improvable assets could intensify even if headline deal values remain subdued.
COMPETITIVE LANDSCAPE SNAPSHOT
