Private Equity Investments Management and Financial Performance of Healthcare Small and Medium Enterprises in Nairobi County, Kenya

Private equity investment has emerged as a critical driver of growth and financial performance in Small and Medium Enterprises (Healthcare SMEs), particularly in emerging economies. Despite increasing investments in Nairobi County Healthcare SMEs, challenges such as limited managerial support, unclear investment horizons, and inadequate control mechanisms have constrained optimal financial outcomes. Therefore, this study examined the influence of private equity investment management on the financial performance of Healthcare SMEs in Nairobi County, Kenya. The specific objectives were to assess how equity injection, management support, investment horizon, and control stake level by private equity investors influence the financial performance of the Healthcare SMEs in the County. Theoretical frameworks underpinning this research include Agency Theory, Peking Order Theory, Liquidity Preference Theory and Control Aversion Theory. The study adopted a descriptive correlational survey design, targeting 57 private equity–funded healthcare Healthcare SMEs operating in Nairobi County as the units of analysis, with management and finance staff serving as the units of observation. A sample of 42 healthcare SMEs and respondents were selected using stratified random sampling. Data was collected via structured questionnaires and financial data sheets, and analyzed using descriptive and inferential statistics presented in tables. The study found that equity injection by private equity investors had a significant positive influence on the financial performance of healthcare SMEs in Nairobi County (r = 0.747, Beta = 0.456, p