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City backs health firms

By Alisdair Stirling

Healthcare will be private equity investors´favourite' industry to invest in over the coming year, according to a new survey.

Half of private equity executives surveyed by chartered accountants Grant Thornton UK LLP said healthcare was the top sector they would be active in over the next 12 months.

Just over half cited healthcare as the sector they had been most active in over the previous year. In terms of what investors were prepared to pay, healthcare was ranked the joint highest sector alongside media and communications, the quarterly survey of 100 private equity executives showed.

David Brooks, corporate finance partner and healthcare sector specialist at Grant Thornton said: ´Despite looming public sector cuts that will impact demand for good and services from the private sector, private equity companies remain unwaveringly confident about healthcare deal activity.

He added that private equity firms were 'playing it safe' by backing healthcare, because expectations of returns were greater in the sector compared with other industries.