Why did last year see an unprecedented surge in healthcare private equity?

Global healthcare private equity delivered a historic performance in 2025, with total deal value climbing to an estimated $191 billion, the highest annual total on record and surpassing the sector’s prior peak in 2021, highlighting renewed momentum for investors targeting healthcare assets.

Bain & Company says that the surge was fueled primarily by a sharp rise in transactions valued at more than $1 billion, which helped offset periods of market softness during the year, particularly in the second quarter. Overall buyout activity remained elevated, with 445 deals announced worldwide, making 2025 the second-busiest year on record by volume.

“Healthcare private equity delivered a record performance last year as large deals spiked and deal count rose across all tiers, with the biopharma and provider segments leading the way, driven by healthcare IT activity,” said Kara Murphy, partner at Bain & Company and co-leader of its Healthcare Private Equity team.

Exit activity also rebounded decisively. After a muted 2024, healthcare PE exits rose to an estimated $156 billion in value, the second-highest level ever recorded. Bain attributes the rebound to sponsors reactivating sale processes for high-quality assets and a growing number of portfolio companies approaching the end of their fund lives.

“We also saw a strong rebound in exit value from recent lows, signaling the return of exit activity as sponsors re-launch sale processes for high-conviction assets. The stage is set for an active 2026 due to high levels of dry powder and a growing cohort of sponsor-owned assets reaching the end of their fund lives,” Murphy said.

Sponsor-to-sponsor transactions played an increasingly prominent role in 2025. More than 150 such deals were completed, accounting for over $120 billion in estimated value. Notably, more than 30 sponsor-to-sponsor transactions exceeded $1 billion, a significant increase from the prior year, reflecting growing confidence among PE firms in both asset quality and exit opportunities.

Regionally, North America led the market, driven by a concentration of large-scale transactions. Europe posted strong year-over-year growth as well, nearly doubling deal value, supported by heightened activity in biopharma and healthcare provider services. Asia-Pacific rebounded from earlier tariff-related pressures, with increased dealmaking across Japan, India, and Australia/New Zealand, while Greater China also improved from 2024 levels.

From a sector perspective, biopharma accounted for the largest share of value, rising to an estimated $80 billion. Provider services and healthcare IT also saw meaningful gains as investors pursued technology-enabled platforms and data-driven solutions. Medtech deal value nearly doubled year over year, accompanied by a notable increase in transaction volume.

With dry powder still elevated and exit markets reopening, Bain’s findings suggest healthcare private equity is positioned for continued strength in 2026, creating both advisory and capital deployment opportunities across the ecosystem.