top of page

Key Insights from J.P.Morgan's 'Trends driving the healthcare industry today' report

  • Writer: Nelson Advisors
    Nelson Advisors
  • 6 minutes ago
  • 3 min read
Key Insights from J.P.Morgan's 'Trends driving the healthcare industry today' report
Key Insights from J.P.Morgan's 'Trends driving the healthcare industry today' report

J.P.Morgan's 'Trends driving the healthcare industry today' report


"Capital is back. Healthcare private equity posted a record year for global deal value in 2025. Roughly $1.3 trillion in dry powder is sitting on the sidelines looking for a home. About 350 investors are now active in healthcare deals, nearly double the pre-pandemic count. Direct lending markets are deploying around $50 billion in balance-sheet capital, high-yield spreads sit near historical lows and EV/EBITDA multiples held at roughly 14.5x in 2024 against widespread expectations of compression.


The problem is what those conditions are now demanding in return. Bain’s analysis, presented at the J.P. Morgan Healthcare Growth Forum in Nashville in June, captured it in five words: “12 is the new 5.” A decade ago, a 2.5x multiple on invested capital (MOIC) required roughly 10% EBITDA growth. Today it requires closer to 12%—against historical baselines closer to 5%. Operators are clearing that bar against workforce shortages, reimbursement pressure and a system that doesn’t always reward the right things. Capital is plentiful. Attention is plentiful. AI capability is plentiful. What the market is now rewarding is operational lift—durable, measurable and embedded in how a business runs."



Key Takeaways: Healthcare’s Higher Bar


  • Private Equity Capital Has Re-entered the Market: Healthcare private equity reached record global deal values in 2025, supported by roughly $1.3 trillion in dry powder sitting on the sidelines waiting to be deployed.


  • Deal Math and Return Thresholds Have Reset: Market dynamics have tightened significantly, with distributions to Limited Partners (LPs) standing around 15% of Net Asset Value (NAV)—well below the historical norm of 20%+.


  • "12 is the New 5" in EBITDA Growth: General Partners (GPs) now require a ~12% baseline EBITDA growth rate to achieve a target 2.5x multiple on invested capital (MOIC), a dramatic increase from historical hurdles.


  • Widening Capital Imbalance: GPs are seeking roughly 2.5 times the amount of capital that LPs are actively committing, raising the bar for fundability and execution.


  • Shift from Financial Engineering to Operational Execution: Because multiple expansion and cheap leverage are constrained, value creation now depends on organic growth, operational discipline, and durable margin expansion.


  • Maturation of Healthcare AI: AI applications are transitioning from experimental tools to enterprise-grade solutions, with markets rewarding technologies that deliver measurable operational efficiency and clinical workflow improvements.


  • Reimbursement and Policy Headwinds Demand Resilience: Ongoing payer friction, reimbursement pressures, and changing regulations require companies to build diversified payer models and demonstrate explicit cost savings.


  • Strategic Scaling via M&A: Companies with resilient cash flows (such as SonderMind's debt-funded footprint expansion across commercial and government health plans) are strategically utilizing debt and M&A to capture market share.


  • Workforce Development as a Core Growth Driver: Platforms addressing structural healthcare labor shortages, like Stepful's training pipelines for allied health and nursing staff—are seeing strong institutional demand.


  • Need for Integrated Capital Structure Support: As healthcare businesses scale from venture-backed rounds to complex commercial debt and M&A advisory, maintaining coordinated banking relationships without transactional friction has become critical for liquidity and execution.


Nelson Advisors > European HealthTech, MedTech, Digital Health Investment Banking


Nelson Advisors specialise in Mergers and Acquisitions, Partnerships and Investments for Digital Health, HealthTech, MedTech, Health IT, Consumer HealthTech, Healthcare Cybersecurity, Healthcare AI companies. www.nelsonadvisors.co.uk


Follow Nelson Advisors LinkedIn Page > https://www.linkedin.com/company/nelson-advisors/


Nelson Advisors regularly publish Thought Leadership articles covering market insights, industry trends, deal commentary, market analysis & predictions. https://www.healthcare.digital

 

Nelson Advisors publish Europe's Leading Healthcare Technology Investment Banking Newsletter every week, join 5000+ HealthTech and MedTech subscribers today! https://lnkd.in/e5hTp_xb

 


Nelson Advisors LLP

 

Hale House, 76-78 Portland Place, Marylebone, London, W1B 1NT




Meet Nelson Advisors @ 2026 Events

 

Digital Health Rewired > March 2026 > Birmingham, UK 

 

NHS ConfedExpo  > June 2026 > Manchester, UK 

 

HLTH Europe > June 2026, Amsterdam, Netherlands

 

HIMSS AI in Healthcare > July 2026, New York, USA

 

Bits & Pretzels > September 2026, Munich, Germany  

 

World Health Summit 2026 > October 2026, Berlin, Germany

 

HealthInvestor Healthcare Summit > October 2026, London, UK 


HLTH USA 2026 > October 2026, USA

 

Barclays Health Elevate > October 2026, London, UK 

 

Web Summit 2026 > November 2026, Lisbon, Portugal  

 

MEDICA 2026 > November 2026, Düsseldorf, Germany

 

Venture Capital World Summit > December 2026 Toronto, Canada


Nelson Advisors specialise in Mergers and Acquisitions, Partnerships and Investments for Digital Health, HealthTech, MedTech, Health IT, Consumer HealthTech, Healthcare Cybersecurity, Healthcare AI companies. www.nelsonadvisors.co.uk
Nelson Advisors specialise in Mergers and Acquisitions, Partnerships and Investments for Digital Health, HealthTech, MedTech, Health IT, Consumer HealthTech, Healthcare Cybersecurity, Healthcare AI companies. www.nelsonadvisors.co.uk



Comments

Commenting on this post isn't available anymore. Contact the site owner for more info.
bottom of page