While much of its investment portfolio to-date are with major integrative health service delivery groups, and in pharmaceuticals and life sciences, the International Finance Corporation (IFC) has said it had moved into investing in other verticals like diagnostics and single-specialty care, and has a strong investment pipeline, said Matthew Eliot, Principal Investment Officer, Health & Education, South Asia, IFC.
The investment firm from the World Bank group has an investment portfolio in the Indian healthcare sector with commitments of over USD 450 million, representing over 30 percent of its global healthcare investment portfolio.
Speaking of IFC’s investments in the country, he said, the firm is look for opportunities across the healthcare value chain. “We have a strong investment pipeline that includes providers delivering quality care in the geographies with greatest need. We are looking at integrated hospital chains, single-specialty care providers, pharmaceutical manufacturers, and health sector investment funds,” he said.
“India is a very important market for the IFC and the World Bank Group, particularly in the healthcare sector. IFC has a strong investment portfolio in the Indian healthcare sector, with commitments of over USD 450 million, representing over 30 percent of our global health investment portfolio,” he said.
While much of IFC’s investment portfolio to-date is with the top integrative health service delivery groups, and in pharmaceuticals and life sciences, it has also moved into verticals like diagnostics, with SRL Diagnostics, and single-specialty care, with NephroPlus, a dialysis and nephrology care chain. IFC has also invested in healthcare majors, including Fortis Healthcare and Apollo Hospitals.
Speaking of the long gestation period required in the healthcare sector and the difficulties private equity investors have to face due to this, he said unlike the private equity funds, which face the pressure of delivering returns within a limited period of time, IFC’s funds are evergreen. This allows the firm to provide long-term financing on terms suited to the particular project, including sensible exit horizons which allows it to reinvest funds in other productive enterprises.
The investor sentiment remains strong overall and there are signs of an uptick in market activity, he said. The market demand is clearly there, driven by rising income levels, middle class growth, longer life expectancies, and the rise in incidence of non-communicable diseases. The challenges that remain are related to the valuation expectations and many deals have been in the market for some time without success, including secondary sales where investors may have overpaid at entry and are finding it difficult to get an exit, he added.
It is also working across the World Bank Group in India to leverage the private sector to increase and improve access by the poor to affordable, quality health services, and reduce the financial burden of high out of pocket expenditures, particularly in under-served markets, including tier II – tier III cities and low-income states.