Investors are betting big on mid-market healthcare
Two weeks ago, I attended the HPE Europe 2025 conference, organised by the international law firm McDermott Will & Schulte. The one-day event hosted discussions on European healthcare dealmaking, life sciences trends, investment strategies, and forecasts for 2026.
Of all the sessions the final one stood out to me the most: investment banking experts shared their perspective on the next twelve months, highlighting where opportunities and challenges are likely to emerge in the sector.
The overall sentiment across healthcare and pharma markets was cautiously optimistic.
Healthcare services are slowly recovering, though activity remains relatively subdued, while the pharmaceutical sector is gaining momentum. Interest from European and Asian players, partly driven by ongoing geopolitical tensions, is helping to propel deal activity. Yet, global macroeconomic uncertainty has moderated growth since a strong first half of 2025, particularly for small and mid-cap deals.
Large-cap transactions remain sensitive to regulatory changes, tariffs, and broader geopolitical developments, leading investors to focus on high-quality assets that are most likely to close.
The panelists agreed that mid-cap deals are expected to take centre stage over the next year. Private equity-backed healthcare deals have been particularly active in this space, as mid-sized companies offer greater flexibility for growth and financing, while large assets face exit challenges. Many mid-market firms are pursuing pan-European expansion early, creating attractive cross-border opportunities.
Speakers also highlighted the potential reopening of IPO markets, noting that sustained returns for public shareholders will be key to renewed confidence. Expected interest rate cuts by the US Federal Reserve could further stimulate private equity activity.
Investor interest remains strong in ophthalmology, animal health and pet care, diagnostics, healthcare services, and consumer healthcare, with medtech also drawing attention despite limited asset availability. Across sectors, investors are adopting more proactive and creative strategies, including take-private transactions, although Europe has yet to see a surge in major deals. Adaptability and forward-looking approaches are becoming essential as new assets enter the market.
Looking forward, technology and artificial intelligence are set to transform healthcare investment. From improving patient care to accelerating drug discovery, these innovations are expected to have a substantial impact. AI, in particular, could shorten transaction timelines and enhance efficiency, shaping how deals are structured and executed in the coming years.
My takeaway from this one-day conference was that for investors who focus on quality assets and proactive strategies, 2026 promises significant opportunities in European healthcare, with mid-market deals leading the way.
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