Read the reports on healthcare private equity this year, and you'll see the same stories: record deal volumes, sky-high valuations for urgent care, and the rise of digital health. The headlines point to a handful of crowded, expensive trends. But after 25 years in this business, I've learned the most compelling opportunities are rarely in the headlines. They're usually in smaller towns, focused on specialized services, with business models that the big funds overlook. Here's a look at what's actually happening away from the spotlight.
The Quiet Trends Creating Real Value
While many investors are chasing the same large deals, we've built our portfolio in the corners of the market where real needs are being met. Specialized Services in Rural Markets. The big opportunity isn't always in the cities. Rural markets offer something much more valuable: near-monopolistic positions. Our company Sanderling Renal Services operates dialysis centers and serves over 30 partner hospitals, with more than two-thirds of them in USDA-defined rural areas[38]. That's a real defense you can't find in a saturated city. Community-Based Behavioral Health. Instead of competing for expensive psychiatric facilities, we focus on the huge unmet need for community services for conditions like autism. Family Treatment Network provides essential care where these services simply didn't exist before[39]. End-of-Life Care. Hospice and palliative care is a growing market with predictable demographics and stable reimbursement. In many rural areas, there's virtually no competition. THEMA Health Services serves communities across rural Arizona that other providers have bypassed[40]. The big firms tend to stay in the major hubs, creating an arbitrage opportunity for those willing to get on a plane. In smaller markets, operating costs are lower, and deep community integration gives you an advantage that money can't buy. The most important lesson I've learned is that success comes from treating healthcare as a unique industry, not just another sector for the same old private equity playbook. The firms that will win in the next decade will be the healthcare specialists who understand that the most durable value is often created far from the headlines, by solving real problems for underserved communities.References
- Sanderling Renal Services partner hospitals, https://pharosfunds.com/sanderling.php (30+ partner hospitals, two-thirds in USDA-defined rural areas) ↩
- Family Treatment Network services, https://pharosfunds.com/family-treatment-network.php ↩
- THEMA Health Services Arizona operations, https://pharosfunds.com/thema-health-services.php ↩
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