“Private equity, compared to the endowment and foundation space, is something that health care doesn’t allocate as much to, from a liquidity standpoint,” says Michael Thomas, director and leader of the hospital analytics group at consulting firm Highland Associates. Health care-focused private equity funds, however, have a strong appeal, Thomas adds. Some of the companies in those strategies can lead health care organizations to discover innovative products for themselves, he says.
“Highland Associates has started seeing those investments take off in recent years, with some first movers five to seven years ago”, says Paige Daniel, managing director with the firm. By now, Thomas adds, some health care systems have dedicated innovation teams tasked with sourcing health care-focused strategies or making direct investments in industry firms.
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