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Hello from San Francisco! 

For many of you reading this, you’ve just about survived “JPM week” if you haven’t already wrapped up your whirlwind of speed dating with management teams, PE firms, banks, lenders and so on. Are you sleep-deprived and ready for another vacation? 

As one sponsor noted: “If you make it to 80 percent of your meetings, you’ve had a successful week.” I’m with you. 

For the healthcare private equity community and many other attendees, the JP Morgan Healthcare Conference is much more about all the shenanigans taking place around the Westin St. Francis, where the actual event is held. It may be taboo for bankers to show up at competitors’ conferences. JPM is the exception. Banks, law firms and other advisory groups, large and small, stake out hotels and restaurants in the surrounding area. And there’s not enough time to hit every reception each night, if that’s your thing. 

As I write this hurriedly amidst Day 3 networking and evening receptions, here’s a bit of what I’m hearing about 2019’s outlook for healthcare PE. 

The deal pipeline is status-quo -- especially in healthcare services. There’s lots of noise around the credit markets. But it’s still a great time to sell and valuations remain strong. While pricing in the debt markets could eventually “let the air out of the valuation balloon,” as one GP put it, that has yet to reduce sponsors’ eagerness to transact or price expectations in the healthcare arena. 

There’s also no big healthcare policy overhang issue that’s widespread. The possibility of ACA repeal and the Trump administration were major topics of conversation in recent years, but that’s no longer the case. There’s certainly vertical-specific policy issues folks are talking about. But for now, broadly, Washington is quiet. 

An interesting side note: JPM week is typically a popular time for companies to unveil their blockbuster megadeals. This year in healthcare services: nada. There were plenty of deal announcements but nothing so sizable or transformative that changes the industry landscape in a big way. Coincidence? A result of the cooling off in the public markets? What do you think? Hit me up with thoughts at

If you build it, they will come

People love to hate JPM. Or maybe it’s more of a “love-hate” relationship. Either way, the crowd keeps coming back to the Bay each January to kick off the year. 

That said, I did hear anecdotes throughout the week suggesting that more PE folks are opting out of JPM, questioning whether the escalating costs of hotel rooms and meeting spaces are worth the value and efficiency the event produces. 

One GP told me his healthcare shop was spending $125K over four days to attend JPM, with rooms requiring a four-night minimum at $1,500 a night. Another GP told me he was paying $2,000/night for a room, which also required a four-night stay. 

On the other hand, others I spoke with contended that the sheer number and diversity of people attending keeps growing. Even more, JPM is increasingly less exclusive to healthcare-focused professionals. For instance, one sponsor noted that a few of his firm’s generalist LPs came out to see what it’s all about. 

Whatever the case, JPM is always evolving. I’m still a relative newbie -- 2019 was only my third year attending -- so I polled a bunch of sponsors this week for their takes on JPM and how it’s changed in recent years. 

The one thing I heard repeatedly: PE firms are no longer launching and running formal auctions at JPM the way they once did. Rather, it’s all about pre-process “fireside chats” with management teams and previews of assets poised to hit the auction block later in the year. 

Here’s what a handful had to say about this evolution and the effectiveness of the event generally speaking, edited and paraphrased for clarity:

Sponsor A

Five years ago JPM was full of efficient kickoff meetings with bankers and lenders. A lot more sponsors were actually launching processes. 

Now it’s all about “fireside chats,” which are so cursory. [Management teams] are not that prepped. People are now saying, “It’s not that productive.” It’s scattered. It’s superficial. Everything I learned could have been learned in 15 minutes from a teaser. You do get the flavor of management, but it’s such a short amount of time and you spend 15 minutes introducing yourself.

Sponsor B

If fireside chats at JPM are done the right way, they’re valuable. If you’re a [management team] trying to get people up to speed on your story or a firm really trying to learn about a business, it is not enough. But it can serve as the start of a continued evolution of a relationship. 

Sponsor C

I think of JPM as a mosaic. Altogether, you get your finger on the pulse of the market. It’s irreplaceable to get so many peoples’ views so quickly. The timing itself helps prioritize your mandates for the year and impacts the healthcare-deal calendar. 

What’s in vogue? Bankers are now saying, “We’re not launching a process yet … but it’s coming next week.” It’s more of a preview. 

Sponsor D:

I used to come to build my network. Now it’s a great place to maintain my network. If you’re contemplating exploring a sector or selling an asset, you can get the smartest guys to opine on it. 

Fireside chats are worthless. Management teams don’t take them seriously.

Sponsor E:

I don’t come here thinking I’m going to make my next deal. The networking aspect is better than the deal generation. 

Sponsor F:

I spend JPM finding retired or semiretired CEOs. My strategy is executive-oriented. We come out of it with 10 qualified board members. 

Sponsor G

JPM is like a velvet rope. If you’re not based in NYC, it’s super valuable. It allows you to prioritize. If you are a savvy company and come to JPM, by excluding people in meetings, you raise your profile. 

I’m not attending thinking I’m going to find a team I’m going to back. I’m not going to find my next platform, but maybe an add-on, or maybe I’ll find something else. Human resources, person connections. That’s worth it.

Sponsor H:

Fireside chats? Yes, they’re effective. It’s a good way to network and begin a multiyear relationship that could lead to something. Sometimes it take four years of meeting folks in various ways for something to happen. 

Sponsor I:

Sale processes are designed to maximize an outcome. More exposure at JPM is always a good thing. As a sponsor, the exchange of info you get is minimal. But it’s more facetime with a given team. 

That’s it for now. Stay tuned for brewing deal activity in the weeks ahead. ICYMI, one on the horizon I learned about this week was PE-backed Hospice Compassus. Check out my story for more detail.

Which interesting emerging themes or hot auctions at JPM have you heard about? I’d love to know. Reach me at with any tips, comments, or just to say hello.



Top Stories

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