First, focusing on companies that have the potential to become market leaders and these companies typically exhibit scalability, market differentiation and strong growth potential. Second, investing in businesses with strong financial tr
First, focusing on companies that have the potential to become market leaders and these companies typically exhibit scalability, market differentiation and strong growth potential. Second, investing in businesses with strong financial track record, generating strong and regular cashflows over a period of time such that their underlying risk is low. Third, choosing only to invest in established, growth businesses and as such, do not invest in companies with binary risks (e.g. biotech or standalone greenfield hospitals / facilities).
To set on the path to leadership, a company first needs to define the areas of leadership that are the most meaningful to their business partners and the definition can be across metrics (e.g. brands sales, market share, clinical reputation / recognition), geography (e.g. region or country) and subsegment (e.g. secondary, tertiary or single specialty). Having defined the areas of leadership, the company needs to have clear plan to build enablers and differentiators in its business model to achieve the desired position.
Identifying strategic initiatives that are uniquely impactful to the businesses can be done by having a clear roadmap to value creation for every company we invest in, which starts with aligning with the promoter and management on the value creation roadmap pre-deal. Here, we have to focus on initiatives with the greatest potential for impact and translate them into 100-day and 3-year business plans.
Businesses must dedicate an investment and operating team for every portfolio company and facilitate inspire ownership through participation on the Board, Executive Committee and specific value-driven committees of our portfolio companies.
Asia is already a prime hub for PE investments and most major PE funds and PE investors are accessing Asian growth story. For example, The Asian healthcare industry is expected to grow at 12.5 per cent per annum, far outstripping the global healthcare market growth of 4.5 per cent. By 2020, Asia’s healthcare markets will be worth US$3 trillion and by 2030, a US$4.3 trillion market which is larger the U.S. and Europe healthcare market combined. Driving the shift in the global centre of gravity from the developed western market to Asia are irreverisble, fundamental trends. We believe that the sheer size of the Asian growth opportunity and the interplay of fundamental growth drivers will only increase the level of investments in Asia. As the size and maturity stage of companies grows, as more global leaders emerge out of Asia, the existing investors will increase their exposure to Asia
Home healthcare business model has a huge potential to provide a win-win solution to hospitals, doctors, patients and insurance companies. Hospitals and doctors gain by de-clogging scarce bed capacity and transfer out low yield patients and focus on more critical ones, patients gain by mental and logistical convenience of being treated at home at much lower costs and insurance companies gain by reducing their pay-out burden relating to un-necessary hospitalisation.
For us, India is the biggest investment market and we are very positive on its prospects to keep generating high returns for investors over the next few years. It will ultimately become one of the largest healthcare markets, given its large population, growing income levels, availability of entrepreneurial and clinical talent and a conducive policy framework.
Today, India boasts of few of the largest hospital chains in Asia, few of the largest generic pharmaceutical companies globally (over 10 per cent of the global pharmaceutical production and 20 per cent of the global exports of generic drugs), high end diagnostics companies that serve the global markets and some of most exciting new age healthcare models (for example, home healthcare). This will only grow with time and catapult India into a pole position in the global healthcare space, both as a consumer and supplier of healthcare products and solutions.
It primarily comes from our understanding of the trends which are going to shape the future of the industry and how the company should adapt and improvise to address the opportunities and challenges which those trends are going to present. After aligning on these with the owners and management teams of investee companies, a three or five year business plan will be addressed to address them and set objective goals.
The key is to find mass market sustainable business models that focus on making profits via high volumes and operational efficiencies and not via charging high prices. Aligning to this approach, we can screen investment opportunities for their potential to increase access to high quality and affordable healthcare while generating awareness about better health outcomes and healthy living in the communities they serve.
