Jefferies Healthcare Conference: 2024 could prove to be a better year for deals and investment in management teams

Carter Schwartz recently attended the Jefferies 2023 London Healthcare Conference. 

Global industry executives and leading private equity investors gathered to discuss important themes transforming the healthcare services space. Held over three days, panel discussions and insights spanned digital transformation, the need to invest in management teams, the economic impact on deal flow, as well as exciting developments in the changing mind-set and cultural aspects of healthcare. Delegates heard from dentistry to the latest in FemTech and CDMOs and the obesity drug debate.

Micro discussions focused on the fact that many companies have spent the year focusing on their cash position and operational performance, ahead of a predicted (if perhaps modest) uptick in 2024. There was a general sense that strategic corporate investors have begun to return to the market in a more active way. Innovative science has continued to be cyclical, with a number of high quality deals still getting done in 2023 despite interest rates and general pricing misalignment. (Research from Financial Times and Jefferies)

According to Jefferies, there is a large backlog of assets ready to be put on the market. ‘Investors will need to be selective about the assets they want to focus on and sellers will need to careful about when they go to market so as not to get lost in an abundance of available opportunities.’

Earlier in the week, Jefferies also published its 2023 Healthcare Temperature Check report. Some key takeaways are summarised below:

  • There is confidence that M&A levels will recover to some degree next year, with 68% predicting deal volumes to be higher in 2024 than in 2023. M&A led by corporates is seen to be the key driver of this activity, selected by 60% as the most dominant type of transaction.
  • The outlook for the IPO market remains highly uncertain with views mixed as to whether it will return – 40% say it will and 37% say it will not. Of all respondents, private equity is the most bullish with 47% predicting a return.
  • Raising capital remains a significant challenge, with 68% of respondents stating that the current economic environment is having a majorly adverse impact on the ability of healthcare companies to raise capital. Lack of funding was also picked as the number one threat to the sector when participants were asked to pick out what they see as the greatest risks.
  • While North America is, once again, the market selected as representing the most value opportunity, it is interesting to see sentiment towards mainland Europe improving. 43% of respondents highlight it as a value opportunity going into 2024. Private equity is the most enthusiastic, with 65% seeing upside value in Europe.
  • 44% of participants expect to increase their exposure to healthcare in the next 12 months, a higher proportion of respondents compared to last year. Private equity is most confident about deploying capital, with 58% expecting to increase healthcare exposure in 2024.
  • Although uncertainty persists, there is hope for equity market strength in 2024, with nearly half of respondents expecting the FTSE100 to be higher at the end of 2024. There is even more bullish sentiment on healthcare itself, with 54% expecting the MSCI World Health Care Index to rise.
  • Last, supply chain pressures are thought to be moderating with the number concerned about the business impact of these significantly falling to 39%. Institutional investors are the most relaxed, with 61% expressing limited concern about the business impact of supply chain challenges.

This article featured comment from Jefferies, HealthInvestor, Financial Times, BioPharma Reporter and Lexology.

About Carter Schwartz

Carter Schwartz is a leading executive search boutique focussed on the independent healthcare industry. For 10 years, the firm has been at the forefront of successfully sourcing boardroom and senior leadership roles across the rage of healthcare subsectors. Our contact’s book and experience, combined with the rigorous process our team works to, means we have built a firm that tirelessly delivers. Carter Schwartz is now building out its presence outside the services subsector in MedTech and Life Sciences.

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