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PE spots opportunity in mental and behavioral health; New Mountain forms RCM platform via 3-way merger

Morning Hubsters, John R Fischer here with the US Wire from the New York newsroom.

I’m sure all of you are looking forward to what is hopefully a stress-free three-day weekend. As May is Mental Health Awareness month, we focus on sectors today that fit in with that theme.

First up, we have a seven-deal listicle on mental and behavioral healthcare, which has caught the attention of KKR, Clearview Capital, Northlane Capital Partners, and Sovereign Capital Partners, among others.

Then, it’s time for Friday Focus. This morning, we shine the light on a three-way platform merger by New Mountain Capital in revenue cycle management, a sector where new technologies are helping reduce the stress of administrative challenges and labor shortage for healthcare providers.

Taking care
An opportunity to broaden the services and geographic reach of mental and behavioral health providers has stirred up dealmakers’ interest in the segment, and PE Hub has noted a slew of deals in the sector since the start of the year. I rounded up seven deals involving mental and behavioral health providers.

Premium subscribers to the Wire can read details on two of the deals.

Friday Focus

Earlier this week, New Mountain Capital announced the plans to form Smarter Technologiesthrough a three-way merger of its portfolio companies SmarterDx, Thoughtful.ai, and Access Healthcare.

New Mountain announced the investments in SmarterDx and Thoughtful.ai in April. The investment in Access Healthcare was announced in January.

Other PE firms targeting the sector include InTandem Capital Partners, whom I spoke to earlier this year in an exclusive on its acquisition of Healthfuse, an RCM vendor manager, from New Capital Partners.

I also spoke with Rick Zall, chair of healthcare transactions and regulatory practice at law firm King & Spalding, back in October. Zall told me that caution around heavily regulated industries like hospitals has led PE firms to instead invest in hospital-based services, including “administrative functions like revenue cycle management.”

Upgrade to the premium version of the Wire to learn more about New Mountain Capital’s three-way merger.

That’s it for me. Before I sign off, a schedule note: In observance of Memorial Day in the US and the bank holiday in the UK, there will be no Monday editions of either newsletter. Craig McGlashan will bring you the Europe edition on Tuesday, while Obey Martin Manayiti, who has returned from parental leave, will write Tuesday's US Wire.

Cheers,

John

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Having raised more than $550 million across two funds, SV Health Investors believes it has the world’s largest VC platform investing solely in companies developing or enabling novel therapeutics for dementia. It is, however, just a “drop in the ocean” relative to the size of the investment opportunity, according to partner Laurence Barker. (New Private Markets)

For the longest time, the secondaries market has been split into two distinct segments: LP-leds and GP-leds. While both deal types provide liquidity to LPs, the former are initiated by investors, and the latter are initiated by sponsors who are also looking to facilitate a longer hold on assets. There’s a third type of transaction, however, popping up on desks: the buyer-led deal. (Secondaries Investor)

From accounting software to language processing tech that reduces booking times, private equity has been busy transacting in the segment. PE Hub rounds up six deals in the hospitality tech sector since the start of 2025.

Royal London has agreed to acquire UK infrastructure asset manager Dalmore Capital, a deal that marks a strategic expansion of the mutual insurer’s private markets capability and reflects rising institutional interest in long-duration, core infrastructure exposure. (Infrastructure Investor)

As the private credit space booms with several multi-billion-dollar deals emerging in the market over the past year, buyers are navigating a narrow bid-ask spread when evaluating portfolios. (Secondaries Investor)

Beach Point Capital Management has raised more than $1.25 billion for two debt funds: $750 million for an opportunistic credit fund – its largest to date – and $545 million for its first real estate debt fund, the manager said in a news release. (Private Debt Investor)

What APG looks for in an impact manager: Head of impact at APG Global Private Equity Keren Raz describes a 'rigorous and robust' due diligence approach that "values partnership." (New Private Markets)

As the US raises up trade barriers, will Europe become a new land of opportunity? If European private debt is going to advance, there has never been a better time than now. (Private Debt Investor)

Deals

They said it

Healthfuse “has few, if any, real competitors, at all, in this specific niche of the healthcare RCM sector. Additional private equity activity will continue to occur in healthcare revenue cycle management, but in this specific angle, Healthfuse is the play.”

— Brad Coppens, senior partner, InTandem Capital Partners, on how investing in companies with unique functions like Healthfuse is key to scaling RCM investments.

Today's letter was prepared by John R Fischer

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