Category: 3. Business

This article is part of Bain’s 2026 Global Healthcare Private Equity Report.

Pharma services investments have long benefited from consistent demand, propelled in large part by the pharma industry’s reliance on specialized contract research organizations (CROs), contract development and manufacturing organizations (CDMOs/CMOs), and outsourced commercialization services to provide efficiency, flexibility, and specialized expertise. These fundamentals have supported private equity (PE) deal activity and performance even through cycles of market choppiness. The sector’s resilience was evident in 2022 and 2023: While overall healthcare PE activity softened during this period, pharma services transaction value and deal volume remained steady (see Figure 1).

Pharma services investment growth has slowed

However, the momentum of 2022 and 2023 has moderated, as pharma services volume has declined at a roughly 11% compound annual growth rate from its peak in 2023, while the rest of healthcare PE has seen volume increase at an 11% CAGR in the same period. This moderation reflects a combination of headwinds facing the sector, including decreased biotech funding and fewer clinical trial starts, policy and trade developments that raise uncertainty, pricing pressures on pharma companies, and valuation gaps between buyers and sellers.

In the US, venture capital for biotech and pharma companies has moderated to pre-2021 levels, reflecting a normalization following the highs of 2020 and 2021 (see Figure 2). Additionally, global clinical trial starts, particularly in early-stage and drug discovery programs, have followed a similar trend, returning gradually to pre-pandemic levels and tempering demand for pharma services.

Meanwhile, policy and trade developments—think US tariffs, the One Big Beautiful Bill Act, the BIOSECURE Act, vaccine policy, and most-favored-nation drug pricing reform—have heightened uncertainty around global pharma supply chains and pricing frameworks. In response, pharma services transactions have targeted areas more insulated from policy shocks, such as CRO/site networks, manufacturing, and businesses with limited exposure selling into US markets.

Large pharma companies also face constrained budgets as macro uncertainty—amplified by pricing pressures, upcoming loss of exclusivity cycles, and Inflation Reduction Act pressures in the US—has hurt financial performance. In turn, these constraints have limited investment in nonessential outsourced services, affecting the growth performance of pharma services vendors broadly (see Figure 3).

Finally, a gap persists between seller and buyer valuation expectations, as most assets purchased during the peak years of multiples between 2021 and 2022 remain in fund portfolios. Although average transaction multiples have declined since then, they are still above pre-pandemic levels. Combined with broader end-market softness, this contributed to a decline in sponsor-to-sponsor transactions, which was especially evident in 2023, although sponsor-to-sponsor activity rebounded in 2024 and 2025 (see Figure 4).

The year 2025 was the largest on record for pharma services on a value basis. This was led by Bain Capital, Kohlberg, Mubadala, and Partners Group’s investment in PCI Pharma Services, a CDMO deal that accounted for more than one-third of the year’s value. Two other important North American transactions were THL Partners’ acquisition of Headlands Research, a KKR-owned clinical trial site network, and BayPine’s acquisition of CenExel Clinical Research, another clinical trial site network, from Webster Equity Partners. These three North American deals reflect the ongoing appetite for large-scale, high-quality service platforms.

In Europe, investors have targeted players with strengths in niche categories. Renaissance Partners and Aurora Growth Capital acquired Genetic, a dossier developer, from CVC Capital Partners, while EQT acquired Adalvo, another dossier developer, from Aztiq. And in Asia-Pacific, Temasek and GIC’s investment in Novotech, a CRO, alongside existing investor TPG, was a highlight in an otherwise slower year for pharma services activity in the region.

Further, many large-scale exits underscore continued strategic interest in high-quality pharma services businesses, exemplified by Thermo Fisher Scientific’s acquisition of Clario Holdings from a shareholder group led by Nordic Capital and Astorg.

Investment strategies for a shifting environment 

Pharma services investors are making use of several approaches to adjust to current headwinds:

• A barbell approach targeting scale and potential. First, investors are emphasizing premium assets offering scale and clear differentiation. Second, investors seek under-optimized or subscale platforms where operational improvement can unlock meaningful growth.
• A focus on business models and markets relatively insulated from volatility. In a reversal of a trend seen in the late 2010s, investors are scanning for companies with greater customer exposure to large pharma sponsors rather than early-stage biotech. Another desirable trait is strong revenue visibility, as with long-duration programs. US-based infrastructure deals resistant to policy change or with limited cross-border exposure may also look attractive. And finally, buyers are eyeing carve-outs and public-to-private transactions, concentrating on assets that could benefit from improved operational execution.
• A structured playbook to pressure-test deal assumptions and develop value-creation plans. Leading investors are developing methodical scenarios to test risk limits; build conviction in value-creation levers across top-line growth, AI-driven operational efficiency, and strategic mergers and acquisitions; and secure investment committee approval even amid macro and policy shifts.

Pharma services remains exposed to secular tailwinds that remain attractive over the long term, and leading investors have continued to find strong opportunities despite recent underlying challenges. As market conditions evolve, a persistent and disciplined approach will continue to drive sustained returns.

Read our 2026 Global Healthcare Private Equity Report

More from the report

The Peter Principle, introduced by Laurence Peter and Raymond Hull in 1969, suggests that employees typically rise to “a level of respective incompetence.” Organizations continue to promote high performers until their performance declines, often leaving them in place instead of moving them into roles that better use their talents. Over time, this pattern fills management or leadership roles with people whose past success does not align with the demands of managing a team, creating gaps in key proficiencies such as people management skills.

Recent Gallup data suggest that the Peter Principle is playing out among frontline supervisors in the U.S., with potentially negative consequences for employee engagement and organizational performance.

Most Frontline Supervisors Move From Top Individual Performers to Supervisors

Supervisors of frontline employees are those who say they manage workers engaged in “core activities or day-to-day operations such as manufacturing goods, healthcare, retail, food service or providing services.”

Sixty percent of all supervisors surveyed meet this description. Among them, 65% say they obtained their frontline supervisory position based on performance or years of experience in a frontline role. Only 30% say their organization placed them into their position based on supervisory skills, experience as a supervisor or because they began their career as a supervisor.

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The Peter Principle’s Impact on Employee Engagement

Supervisors of frontline employees who obtained their position through performance or years of experience are less engaged (31%) than their peers who obtained their position through supervisory skills, experience as a supervisor, or who began their career as a supervisor (42%).

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This gap in engagement between frontline supervisors who reached the role via individual frontline performance and those who did so based on supervisory skills or experience can have a significant effect on their teams.

Research shows that supervisor engagement influences the employees who report to them. Gallup’s meta-analysis of the relationship between manager and direct report engagement, as reported in Culture Shock, finds that managers’ own engagement, effectiveness, and natural talents account for at least 70% of the variance in team-level engagement, even while controlling for other factors. Furthermore, managers in the top quartile of engagement have teams with engagement levels that are, on average, 11 percentile points higher than the teams of managers in the 50th percentile of engagement.

The effects of the Peter Principle could be especially detrimental to frontline employees who already experience subpar levels of engagement. Frontline workers in the U.S. have lower levels of engagement than the U.S. workforce broadly (26% vs. 32%).

Investing in Better Selection and Training

One way to mitigate the adverse effects of the Peter Principle is to hire and promote based on supervisory talent rather than performance or experience in a frontline role alone. Science-based structured interviews and assessments help organizations identify individuals with supervisory talent. A meta-analysis of 136 studies in which structured interviews and assessments were administered to 14,597 managers found that hiring based on managerial talent increased sales or revenue by 21% per manager and profit by 32% per manager.

Another way to better equip supervisors for success is through supervisory training programs. Yet only 45% of frontline supervisors say they took part in supervisor training or education in the past year. Another 32% say they took part in such training, but not in the past year. Nearly a quarter (23%) say they have never taken part in training.

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Frontline supervisors who have taken part in training specifically focused on becoming a better supervisor in the past year report better outcomes. They are 79% more likely to be engaged, 19% less likely to feel burned out at work very often or always, and 11% less likely to be actively looking or watching for a new job.

Implications

Across industries like manufacturing, healthcare, and retail, most frontline supervisors are promoted based on individual performance or experience as frontline workers. As the Peter Principle suggests, this approach does not guarantee success as a supervisor. In fact, the practice can be costly. The National Bureau of Economic Research found a 7.5% decline in subordinates’ sales performance when organizations promoted high-performing sales representatives to managerial roles.

Gallup research shows that frontline supervisors who reach their roles based on individual performance are less engaged than those selected for supervisory skills or talent. That difference can have a trickle-down effect on the engagement of the teams they manage. However, the data also suggest that investing in more careful selection processes and more timely supervisory training are great ways to address lower engagement levels among first-time frontline supervisors.

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Release date: 08/01/26

Published Date: 08 Jan 2026

In 2025, HDB completed about 19,600 flats, including the final set of public housing projects in Bidadari

HDB will launch about 19,600 Build-To-Order (BTO) flats in 2026 across three sales exercises in February, June and October. Of these, more than 4,000 flats (about one-fifth of the 2026 flat supply) will be Shorter Waiting Time (SWT) flats with wait times of less than three years. 

 

2 There will be a good mix of Standard, Plus and Prime BTO flats in various locations such as Ang Mo Kio, Bukit Merah, Sembawang, Toa Payoh, Tampines, Woodlands and Yishun. With the upcoming launches, HDB remains on track to meet our target of offering about 55,000 flats from 2025 to 2027 to meet sustained housing demand.  

About 19,600 Homes Completed in 2025

3 In 2025, HDB completed about 19,600 flats across 28 housing projects, with a median wait time of about four years. Among the projects completed, three – Parc Clover @ Tengah, Hougang Olive and Yishun Boardwalk – were SWT projects completed with wait times of less than three years. In addition, several projects such as MacPherson Weave and Costa Grove were completed about three months ahead of their original Probable Completion Dates (PCDs).

Final HDB Housing Projects at Bidadari Completed

4 Among the homes completed in 2025 were the final set of four projects in Bidadari – ParkEdge @ Bidadari, ParkView @ Bidadari, Bartley Beacon and Bartley GreenRise. This marks the completion of all public housing projects in Bidadari estate, a decade since the first Bidadari BTO projects were launched in end-2015.

 

  

ParkEdge @ Bidadari (left) and ParkView @ Bidadari (right) [Credit: HDB]

 

  

Bartley Beacon (left) and Bartley GreenRise (right) [Credit: HDB]

 

Building Endearing Homes for Singaporeans

5 At present, there are 127 HDB housing projects under construction, an increase from 110 a year ago. HDB will continue to work closely with agencies to complete key amenities, community facilities, and precinct landscaping in tandem with the new housing developments as much as possible, so that residents can enjoy them soon after they move in.

 

 

 

 

 

Highly Capable Information

Dear Families of Highly Capable (HC) Qualified Students,

Seattle Public Schools (SPS) is committed to expanding equitable access to Highly Capable (HC) services across every region of our district. To support this work, we want to share important updates about the HC identification timeline and this year’s enrollment process.

HC Identification Timeline and Extended Enrollment Window
HC identification results for the 2026–27 school year will be released in early February. Because this timing occurs after the start of districtwide Open Enrollment, SPS is providing an extended enrollment window for all HC families—both current and newly identified—from Feb. 7 through Feb. 28. Late applications will also be accepted through March 31 to ensure families have ample time when making enrollment decisions.

We realize this year’s enrollment process is earlier than in previous years and does not fully align with the HC identification and planning cycle. We are working closely with the Enrollment Department to ensure HC families receive clear information and expanded flexibility.

Update to the School Board on Community Engagement Findings
In January, the HC Department will present an update to the School Board summarizing findings from the fall HC community engagement meetings. While we had hoped to share finalized details before the start of open enrollment, we need additional time to ensure we have processed through all the data received and any intended expansion efforts are thoughtfully designed and supported.

Thank you for your patience, partnership, and continued advocacy. We remain committed to increasing equitable HC opportunities in every region of Seattle and will continue to share updates as more information becomes available.

Sincerely,
Dr. Paula Montgomery
Director, Department of Highly Capable Services
Seattle Public Schools