Private equity investment and ownership in healthcare businesses has been a frequent topic in the news, with coverage largely focusing on negative aspects of private equity’s involvement and engagement in this sector.
Recent Legal and Regulatory Developments
One notable case highlighting concerns about private equity’s role in healthcare occurred in Sacramento County. A jury awarded $110 million to the family of a woman who died of hypothermia after she wandered outside an assisted living facility. Mildred Hernandez, who had been a resident of Greenhaven Estates in Sacramento for over five years and suffered from Alzheimer’s dementia, was found unresponsive in the early morning hours on February 12, 2019, when temperatures dropped to 38 degrees.
The wrongful death lawsuit alleged that the facility failed to provide adequate supervision and safety measures, allowing Ms. Hernandez to leave and remain unaccounted for. The family was represented by Dudensing Law, and the suit targeted Formation Capital, the asset manager, and Colony Capital, the owner of Greenhaven Estates (now rebranded as DigitalBridge).
Investment Trends in Assisted Living
Despite negative press, private equity investment in assisted living remains strong. Recent data and industry reports indicate sustained or increasing activity within the broader senior living sector. According to the JLL 2026 Seniors Housing & Care Investor Survey and Trends report, senior living transaction volumes reached decade-high levels in 2025, totaling $24 billion by year-end. Assisted living emerged as the leading investment focus, with 40% of surveyed investors selecting it as their top priority for 2025, marking a significant shift in emphasis.
In 2025, private capital—including private equity—accounted for 50% of transaction volume, a slight decrease from 60% in 2024, but still near the long-term average of 52% since 2016. Overall, senior housing M&A activity reached record highs in 2025, with 871 publicly announced transactions—a 20.8% increase from 2024—and total disclosed spending of $30.5 billion, representing a 177% rise in dollar volume year-over-year, according to Levin Associates. Assisted living deals were particularly prominent during the fourth quarter of 2025.
A 2025 JAMA Network Open study analyzing private equity acquisitions of assisted living facilities (covering trends through 2023 and projected into 2025) identified 252 PE deals involving 912 facilities. Transaction activity has notably increased since 2013, with deal counts peaking in 2021 and transaction values in 2019. While the study does not capture the full scope of 2024–2025, its findings confirm the growing interest of private equity in assisted living, driven by demographic shifts.
Investor Outlook and Sector Dynamics
Investor outlook for senior living assets remains optimistic. According to the JLL survey, 86% of respondents plan to increase their exposure to senior living assets in 2026. Factors driving this outlook include the projected 36.6% growth in the population aged 80 plus over the next decade and the prevalence of assets trading below replacement cost. Private equity continues to play a significant role in the sector, both through direct facility ownership and operator investments, as well as through software platforms supporting assisted living.
Although concerns persist regarding private equity involvement—such as debt management in nursing homes and calls for regulatory reform—these issues are more pronounced in skilled nursing than in assisted living. There is no substantive evidence indicating a broad reduction in private equity engagement within assisted living. On the contrary, the sector benefits from ongoing consolidation, favorable demographic trends, and competitive investor interest.
Regulatory Developments and Oversight
Regulatory developments concerning private equity ownership in assisted living facilities show increased oversight and calls for greater transparency. Assisted living entities remain subject to less regulation than skilled nursing facilities, which receive more federal funding through Medicare and Medicaid. This shift is part of a broader examination of private equity’s influence within healthcare, with ongoing concerns about potential effects on care quality, staffing levels, costs, and financial stability. While such issues are well-documented in nursing homes, they are increasingly relevant to assisted living amid sector growth and continued consolidation.
In 2024 I wrote an article on the regulatory and legislative activities looking to curb or restrict private equity investment in healthcare. That post is available here: Private Equity Update – Regulation – Reg’s Blog
Key Trends as of Early 2026
State Initiatives Signaling a Regulatory Turning Point
In 2025, several states—including California, Indiana, Massachusetts, Maine, New Mexico, and Oregon—introduced statutes to limit private equity involvement in healthcare. These laws typically address:
- Enhanced ownership transparency and mandatory reporting
- Restrictions on high-risk financial practices, such as excessive leveraging or sale-leaseback arrangements
- Limitations on non-clinicians’ authority over medical decisions
- Requirements for state approval or review of acquisitions and management contracts
- Expanded powers for attorneys general to prevent transactions deemed risky
Federal Proposals and Heightened Scrutiny
At the federal level, bills such as Senator Elizabeth Warren’s Corporate Crimes Against Health Care Act (reintroduced in 2026) seek to curb perceived private equity abuses in healthcare settings Warren renews bid to halt private equity ‘looting’ in nursing homes, citing Genesis bankruptcy. The act proposes criminal penalties of up to six years’ imprisonment for executives if asset stripping results in patient harm or death, and prohibits certain sale-leasebacks among federally funded entities.
Other initiatives, like the Stop Wall Street Looting Act, aim to increase accountability for private equity firms. Although not yet enacted, these proposals signal growing Congressional attention, fueled in part by high-profile cases like Genesis Health’s bankruptcy. A one-pager on Warren’s bill is available here Corporate Crimes Against Health Care Act one-pager (1)
Distinct Regulatory Landscape for Assisted Living
Unlike skilled nursing, which is tightly regulated by CMS—including requirements for detailed ownership disclosures encompassing private equity and real estate investment trust interests—assisted living primarily operates on a private-pay basis and is largely governed at the state level, with minimal federal oversight. A 2025 JAMA study reported a significant increase in private equity acquisitions within assisted living (252 deals involving 912 facilities based on 2023 data), although most regulatory responses have focused on nursing facilities. Industry organizations, such as Argentum, have successfully advocated to limit the scope of some federal bills—such as revised versions of the Health Over Wealth Act—as they pertain to assisted living.
Contextual Drivers and Implications
Ongoing concerns stem from research linking private equity ownership to reduced staffing, increased deficiencies and fines—especially in nursing homes—and potential declines in quality. However, other studies suggest neutral or improved outcomes following acquisition. Robust demographic demand continues to attract private equity investment, while fluctuating regulatory requirements—such as stricter staffing ratios in certain states—introduce operational risks. Experts recommend that providers support balanced reforms to ensure alignment between investor interests and resident well-being.
There is a follow-up piece to this article forthcoming early next week regarding Federal Legislation seeking to ban Medicare reimbursement in hospitals and nursing homes owned by or acquired by, private equity groups.