If you’re looking for a modern — and lucrative — career, consider the place where money and medicine intersect: healthcare investment banking.
It’s where bankers advise healthcare companies on mergers, acquisitions, debt, and equity capital issuances. For the past couple of years, the healthcare investment banking industry has been booming, with a growth rate that’s well above the general market. The sector is a cash cow for banks, which can charge high fees for placements and advice and boasts a diverse client base.
What healthcare bankers do
Healthcare bankers assist companies in three major areas:
- Mergers and acquisitions, specifically pricing, negotiation, valuation, and advancement
- Acting as the mediator between buyers and a company issuing a security
- Raising capital with sales, trading, equity research, retail banking, and commercial banking
Mergers and acquisitions are on the rise, with 2021 significantly outpacing 2020 in total healthcare deals. One of the more notable deals was Pfizer’s $17 billion offer for Hospira. Another high-dollar deal involved Thermo Fisher Scientific’s recent acquisition of the leading clinical research organization PPD for an impressive $17.4 billion.
Hungry for experts
An increase in healthcare deals is pushing the healthcare investment banking industry to find talent fast.
At the top of their hiring wish lists: specialists who know both the medical industry and up-and-coming technology. Firms are competing with each other to snatch up payment technologies and other verticals in the tech industry.
Even investment banking powerhouse Goldman Sachs is losing top talent to other companies, as Chuck Adams, a long-time Goldman Sachs partner and head of its West Coast healthcare division recently moved over to Citigroup as chief of its new global healthcare unit.
“Healthcare, Consumer & Wellness will be one of our largest groups in the Banking, Capital Markets and Advisory group and represents one of the greatest opportunities for growth,” Citi said in a memorandum.
Similarly, Deutsche Bank has been active in the health sector, preparing for the future by actively hiring junior bankers who can help with related IPOs and sales of care-coordination-software companies like PatientPing.
In March, the leading investment bank Oppenheimer announced their plans to build out their healthcare leadership team as part of their investment business. Some of the top talent they acquired comes from the pharmaceutical industry and smaller boutique investment banks.
The trend is expected to continue
The healthcare sector is likely to see a wave of consolidation in the coming years as cash-rich companies look to consolidate. Banks are getting more heavily involved in the healthcare market because the healthcare industry is still largely immune to the disruptions caused by the pandemic.
Migrating from healthcare to finance
Because top doctors have extensive networks, many are transitioning over to the investment banking side. However, those without vast medical knowledge from the informational technology side also find paths into the healthcare investment banking niche.
The healthcare finance market is a highly regulated industry and large, publicly-traded health insurance companies dominate the US healthcare industry. As the healthcare industry grows, so does the financial sector due to constant acquisitions and mergers.
If you have an interest in the healthcare investment banking career field, now may be the perfect time to use your interest to level up your current career choice.