IE University and the International Forum of Sovereign Wealth Funds analyse the future of investment in the healthcare industry

Pharmaceutical and biotechnology companies were two of the main investment targets for sovereign wealth funds, ranking first and third in terms of number of transactions globally, according to the latest Sovereign Wealth Funds Report 2020, drawn up by IE University’s Center for the Governance of Change, in conjunction with ICEX-Invest in Spain.

In addition, sovereign wealth funds reacted quickly to the global pandemic outbreak. The conference entitled “The Future of Healthcare & Long-term Investing”, organised in cooperation with the International Forum of Sovereign Wealth Funds, noted that since the pandemic was declared on 11 March 2020, sovereign wealth funds had doubled the investments made in biotechnology compared to average investments in the same sector during the three previous years.

“Health is a global public asset, as the COVID-19 pandemic has shown,” said Susana Malcorra, Dean of the School of Global and Public Affairs, who welcomed the participants to the webinar.

“At IE University, we attach great importance to understanding the challenges related to promoting a fair health system as it is a basic requirement for prosperous societies.”
Susana Malcorra, Dean of the School of Global and Public Affairs

The conference was attended by representatives from the world's leading sovereign wealth concerns, with funds managing $1.6 trillion registering for the event. They included Georgina Murphy, Senior Investment Manager at Ireland Strategic Investment Fund, who highlighted that ISIF “is a patient investor that provides funding through the capital structure in sectors of strategic interest to Ireland, to generate commercial profitability and economic growth.”

“I've been working in biotech since 1985 and there has never been a time like this,” said Greg Simon, former CEO of the Biden Cancer Initiative and a former Senior Vice President of Pfizer, now an advisor to Preverna, who remarked that “the digital transformation of patient records and communication with patients is accelerating efficacy in the discovery of new treatments and drugs.” Christopher D. McFadden, a Managing Director in healthcare investing at KKR, noted that these investments have the potential to speed up the adoption of healthcare technology, fund research and introduce new payment models, helping to close historical gaps in access, affordability and outcomes in the healthcare industry.

Boom in telemedicine investments

The Sovereign Wealth Funds Report 2020, drawn up by IE University’s Center for the Governance of Change highlights that 2020 was a record year for investments in healthcare innovation, with a special focus on continuous, remote monitoring, in which investments doubled compared to 2019, and in telemedicine, where investments tripled.

Jeff Goldsmith, a veteran policy advisor, author and healthcare expert, stressed that the fight against COVID-19 has not been civilisation's finest hour. “The failure has not been merely political, but also one of collective action: due to the absence of a pre-emptive system, millions of lives have been lost and billions of dollars have evaporated.”

In turn, Duncan Bonfield, CEO of the International Forum of Sovereign Wealth Funds, pointed out that healthcare is a growing market, with a strong focus on technology and that it is a rewarding one for long-term investors, such as sovereign wealth funds.

Finally, it was emphasised in the webinar that sovereign wealth funds, as long-term investors and as state-owned enterprises, can play a key role in transforming national healthcare systems and providing funding to cure disease.

“Biotechnology was the industry of choice for SWFs in 2015-2020. Sovereign wealth funds somehow got ahead of this crisis by supporting companies that today are part of the solution and tomorrow will protect us against new risks.”
Javier Capapé, Director of the Sovereign Wealth Research program at the IE Center for the Governance of Change and organiser of the event