Global Medical M&A Accelerates: Private Capital Eyes Southeast Asian Healthcare Investment Opportunities

Last month, Singapore-based healthcare investment firm CBC Group and UK-based private equity platform Global Healthcare Opportunities (GHO) announced a merger to create the world's largest healthcare investment management company, with assets exceeding US$210 billion (S$269 billion). This has become one of the landmark events in recent global healthcare capital consolidation.

Southeast Asia is also seeing a similar trend. Against the backdrop of accelerating cross-border capital restructuring, the region's healthcare market continues to attract private equity funds, strategic investors, and long-term capital.

In the first half of this year, several major transactions occurred in the regional healthcare capital market. In February, a consortium led by healthcare private equity firm Quadria Capital completed the acquisition of Malaysian pharmaceutical company Apex Healthcare for approximately RM1.9 billion (S$617 million) and took it private. In March, Malaysia's Sunway Healthcare went public in the country's largest initial public offering (IPO) in nearly nine years.

Deloitte's "2026 Asia Pacific Private Equity Investment Yearbook and Southeast Asia Insights" shows that in 2025, the Southeast Asian private equity market saw 56 acquisition transactions totaling US$6.4 billion. The healthcare sector accounted for 20% of the deal volume and 14% of the total value, second only to the Technology, Media, and Telecom (TMT) sector.

The report notes that amid rising global uncertainty, investors are increasingly favoring industries with stable demand and predictable cash flows, and healthcare is one of the defensive assets.

Stable Structural Demand but Insufficient Public Spending: Opportunities for Private Capital

Quadria Capital's privatization investment in Apex Healthcare was the largest healthcare private equity deal announced in Southeast Asia in 2025 and the third-largest private equity deal across all industries for the year.

Quadria Capital partner Ewan Davis said in an interview with Lianhe Zaobao that this deal marks the institutionalization of Southeast Asia's healthcare industry. "A transaction of this scale shows that private capital is not only willing to enter the sector but also capable of providing long-term funding support for the transformation of the regional healthcare system, while also reflecting growing market confidence in the sustainable expansion of Southeast Asian healthcare platforms."

He pointed out that the core drivers for private equity funds entering Southeast Asia's healthcare market are structural demand, including population growth, expanding middle class, rapid aging, and rising burden of chronic diseases. At the same time, governments are promoting localization of pharmaceutical technology and production to enhance supply chain resilience.

He added that a key background to the accelerated entry of private equity is the chronic underfunding of public healthcare in emerging markets. Many countries' healthcare spending as a share of GDP is far below the levels recommended by the World Health Organization, with some even less than half the recommended level, resulting in an annual funding gap of approximately US$60 billion.

"This gap is widening," he said. "Healthcare demand continues to grow, but public fiscal investment is insufficient, which provides room for private capital to bridge the supply gap."

Within the region, Davis sees Indonesia and Vietnam as the most active healthcare investment markets, with large populations and still-developing healthcare infrastructure. But even mature markets like Singapore have many private investment and exit cases, such as the medical technology company UltraGreen.ai, which listed on the Singapore Exchange last December.

Looking ahead, he expects more large-scale private equity transactions in the region, covering pharmaceuticals and broader healthcare sub-sectors.

Abhay Bangi, EY-Parthenon's ASEAN and Singapore Life Sciences and Healthcare Leader, said in an interview that Southeast Asia's rapid population and economic growth, aging demographics, expanding middle class, low penetration of healthcare infrastructure, and highly fragmented service providers are driving accelerated industry consolidation. As investor preference for resilient and growth-oriented industries strengthens, the healthcare sector continues to attract capital inflows.

Regarding the shift in investment trends, he noted that hospital M&A will remain the market mainstay, attracting nearly two-thirds of investment since 2023. However, capital is gradually shifting to higher-margin sub-sectors such as specialty clinics and diagnostic centers, focusing on cardiology, oncology, and dialysis services.

At the same time, adapting to market conditions, capital is moving from independent telemedicine startups that grew rapidly during the pandemic to enterprise-level B2B platforms and AI solutions embedded in healthcare systems. Hospitals and insurance companies are also accelerating their own digital capabilities.

Valuation Divergence of Listed Healthcare Assets Intensifies: Privatization Opportunities May Increase

The valuation of Southeast Asian healthcare assets has been relatively high. Sunway Healthcare soared 28% on its first trading day, with market sentiment once hot, but the stock later fell below its issue price. Analysts believe the company's fundamentals have good growth prospects, but its valuation is high compared to peers, prompting some market correction.

On the other hand, a healthcare investment report by PwC noted that the public market presents a "mixed picture," and privatization deals for under-the-radar listed healthcare companies may increase.

The report argues that with global stock markets at high levels, valuation divergence among listed healthcare companies has intensified. Some companies with slower growth or complex business structures have not seen their valuations rise accordingly, creating relative undervaluation and providing privatization acquisition opportunities for private equity funds. Especially in the healthcare technology sector, companies with operational complexity or slowing growth may become potential targets.

The report expects privatization transactions in the healthcare sector to increase in 2026, but they will remain selective, focusing on assets with room for restructuring, spin-offs, or digital transformation.

Bangi believes that the overall valuation level of Southeast Asia's healthcare industry may remain high. "To support valuations, investors will increasingly seek value creation through platform integration and M&A. In the future, funds are expected to flow more into foundational capabilities such as data and process standardization, system integration, and AI deployment."