Head of Healthcare Mubasher Sheikh talks about the team’s approach to this complex and vast sector.
What are the trends that inform the fund’s healthcare investment strategy today?
Investing in Healthcare can appear to be very simple. Demand is infinite, the big trends are well known (e.g., aging, obesity, lifestyle diseases, cost-containment) and it appears to a safe place in volatile times. Unfortunately generating differentiated returns comes from identifying the less obvious trends.
Our approach is to try and find more derivative, less obvious opportunities. The aim being to find those rare companies who can unlock a value chain, introduce a new technology or consolidate an industry.
The Permira Healthcare team has been able to identify leaders in very niche and complex markets, what is the team’s approach to this vast sector?
The specifics of each company are inevitably different (e.g., drugs, services, devices) but the best opportunities have some ingredients in common: a management team with vision, a discontinuity in the industry and a quirky approach to solving an important problem.
A recent investment, LSNE. It is a complex and rare asset within pharmaceuticals, focusing on a difficult manufacturing process- lyophilisation. Without this process many advanced drugs and devices cannot be brought to patients. High quality capacity for lyophilisation is in extremely short-supply worldwide. The company has a dynamic and entrepreneurial CEO, Matt Halvorsen, who has the ambition to remove this bottleneck.
You have recently added a first Asia-Pacific investment to the portfolio, I-MED, tell us more about the investment?
I-MED is the leading provider of diagnostic imaging in Australia. It performs advanced imaging (e.g., CT, MRI scans) to diagnose disease. It is a niche we know very well through our investment in Althea, which maintains and services the equipment used in these tests.
The business structurally grows because there is a clear move towards more precise diagnostic as well as preventative discovery and earlier treatment. However, beyond this obvious structural growth there are less obvious ways to grow the business. For example, using Artificial Intelligence to aid diagnosis, improving the efficiency of how the equipment is bought and maintained and trialling new models of how doctors interpret scans. Lastly, there is an opportunity to consolidate I-MED’s position in Australia via acquisitions, something we’ve done repeatedly in other investments.
You now have a global portfolio, what is the next frontier for the youngest of Permira’s sector teams?
I am proud of what the team has built together over the last six years. We are, now, around 20 investment professionals with diverse skillsets thinking about Healthcare trends and opportunities across the globe. We have an equally diverse and global portfolio of companies.
I think when we look back at the industry today 30 years from now, we will think of it as something of an ‘industrial revolution’ in healthcare. We are seeing new technologies just starting to bite. Thoughtful new business models are delivering healthcare at a scale never seen before.
The opportunity is there for both companies and investors to try and shape the future into something that changes the experience of being human. Quite frankly, I think our best days are yet to come.
