As the global economy reels from the shock of COVID-19, there is one industry sector that has remained resilient despite the uncertainty and turmoil: healthcare.
The pandemic has stress-tested the healthcare infrastructure of many nations, accelerating the adoption of digital health solutions and telehealth platforms. It has also proved how much our society relies on agile development of diagnostic kits and new therapies to sustain itself.
Looking at the longer term, an ageing global population combined with increasing income is expected to drive greater demand for healthcare-related goods and services.
Thus, taking into account the non-cyclical, growth-oriented nature of the healthcare sector, Caelus Asset Management Limited has launched an offshore private equity fund: Caelus Global Healthcare Fund SP, which is a sub-fund under the Caelus Global Strategy Fund SPC.
The fund sources companies in the healthcare services, medical technology, and medical device and equipment sectors that can bring significant changes to the global medical industry. These opportunities provide downside protection in addition to long-term capital appreciation and sustainable returns to investors.
Carl Chan, co-founder of Caelus Asset Management Limited said, “The fund will focus on companies with innovative solutions or new technologies for treatment and/or diagnosis. We will also invest in the healthcare service sector, such as elderly homes and special care homes in the United Kingdom. This will make the portfolio more balanced, with both growth elements and stable elements.”
When actually choosing which company to invest in, Chan also explains that Caelus looks at a few factors. “Our approach is to select companies with strong management teams, as the team is a vital factor to any company’s success. We are looking for a team with a strong background in the medical industry, but more than that we want to find passion – a team that is passionate about their innovative device or project,” he elaborates.
“Secondly, we want to see how the company can make their innovation more commercially successful. After all, as investors, we are looking for investment value. For this, we will look at their financial projections – hence that is why we remind company founders to hire a finance manager or specialist to make these projections. We want to see their models like cash flow, revenue generation, target market before deciding to invest in them,” Chan adds.
To tailor the fund to investors’ risk appetite, the fund is structured into two parts: Class A shares which adopt a floating rate distribution; while Class B shares distribute a fixed annual return. The fund offers off-market investment opportunities to investors that might not be available to retail investors, and potentially generate higher returns when compared to IPO investment.
Despite the uncertainty that the COVID-19 pandemic has caused, in addition to the weak economy and pandemic concerns that are also affecting healthcare providers, Chan is optimistic that now is the right time for investment in the healthcare sector.
“COVID-19 has reminded people to focus more on the development of the healthcare industry. As we can see, this year more and more capital is being injected by governments and private investors alike into medical research. We hope that companies can also ride this wave and come up with sophisticated solutions to fight current and future pandemics,” explains Chan.
The investment product mentioned in this article is only intended for professional investors (as defined in section 1 of Part 1 of Schedule 1 to the Securities & Futures Ordinance).
The information is provided for general information purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. Investments involve risks and your investment may suffer significant losses. Investors are advised to seek independent professional advice before making any investment decisions.
This information is issued by Caelus Asset Management Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.