The healthcare sector is not immune to the economic headwinds that have shaken private equity and venture capital (VC) markets. Healthcare fundraising and deal flow surged in 2020 and 2021, buoyed by an increased interest in the sector due to the pandemic, which exposed weaknesses in existing systems and opened the door to the adoption of new technologies. Since this boom, the cost of capital for investing has risen and exits, both on public markets and through M&A, have become much harder to realize. As such, GPs have found it more challenging to raise healthcare-focused vehicles. However, healthcare-focused private equity funds are regularly outperforming their peers.
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Source: https://www.preqin.com/news/the-gp-will-see-you-now-private-equity-in-the-global-healthcare-sector