An Analysis of Joint Ventures and Partnerships: Health Care Entities and Private Equity Firms

Private equity’s interest in the health care industry remains consistent with investments becoming increasingly frequent and diversified. New areas of interest to investors include practices, such as orthopedics, gastroenterology, and urology. Likewise, there has been a surge of interest in the technology and clinical research space. As private equity’s involvement in the health care arena continues to ramp up, trends have started to emerge beyond strategic investments and acquisitions. These new trends include nontraditional funding approaches, such as strategic partnerships and joint ventures. While private equity firms continue to seek opportunities to invest in highly fragmented and undercapitalized industries, they are increasingly interested in more streamlined and efficient business and investment models. Partnerships and joint ventures have emerged on the scene as a way of providing private equity firms and health care entities with a mutually beneficial relationship. These models provide for the continued growth of health care entities and allow private equity firms to capitalize on the health care entity’s expertise.

A recent phenomenon is the emergence of joint venture investment models and partnerships in four distinct areas: Urgent Care, Hospitals, Telemedicine and Health Technology, and Behavioral Health.

The original article, "An Analysis of Joint Ventures and Partnerships: Health Care Entities and Private Equity Firms," first appeared as an AHLA Practice Group Briefing on November 20, 2019.