Thesis-Driven Investing With Pete Tedesco of Health Enterprise Partners

The Capital Corner

How does a thesis-driven private equity firm develop its focus areas and decide which sectors will be most valuable? How do firm leaders identify sectors that will be good for the industry, but also successful investments?

We bring in one exceptional investor, Pete Tedesco of Health Enterprise Partners (HEP), to explain how thesis-driven investing works at his firm.

Pete says it’s all about understanding the current industry climate. And in the coming years, he is expecting a big shift toward value-based care and away from fee-for-service reimbursement. With healthcare technologies as part of HEC’s thesis, Pete says the firm has begun to focus on investing in technologies and services that can best help providers make that transition.

“We're trying to think about it as, how do we help enable the next generation of providers across various specialties to succeed in value-based care models?”

In this episode of The Capital Corner, we also discuss the post-pandemic demands within the healthcare industry and the growing interest in investment of niche healthcare sectors.

Featured Guest

Name: Pete Tedesco

What he does: Pete Tedesco is a Managing Partner at Health Enterprise Partners, a lower-middle market private equity firm focused on healthcare. Pete was previously a Vice President at Olympus Partners, where he evaluated and executed leveraged buyout and growth equity transactions and served on the board of directors for companies in a range of industries. He is currently a board member of MD Alliance and Aware Recovery Care.

Organization: Health Enterprise Partners

Connect: LinkedIn

Notes From The Capital Corner

Top takeaways from this episode

★ Health solutions to post-pandemic issues are important to pursue. One of the biggest challenges facing healthcare providers right now is staffing shortages, resulting in higher labor costs. One opportunity HEP is pursuing to improve outcomes for providers, Pete says, is investment in administrative automation technologies, which can help cut operational costs.

★ Stay ahead of the curve. HEP’s thesis-based investing is all about paying attention to the industry’s needs and the areas that may have disproportionate demand. Behavioral health, women’s health, and especially the technologies providers need to transition to value-based care, have all been sectors at the forefront for HEP. “We're trying to think about it as, how do we help enable the next generation of providers across various specialties to succeed in value-based care models?” Pete says.

★ The future is value-based care. Many providers are preparing for — or have already shifted to — value-based care, Pete says. When considering investments in value-based care models, Pete says considering geographic density is still important. “But then it's also being able to create a partnership with the local payers and being able to create value-based care models that will work and will allow the business to succeed in that given market,” he explains.

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