Advent International

Global Highlights 2013/14


Healthcare has been a busy area for Advent in recent years, and one of ongoing change as rising costs, tightening regulations and increasing demand have led to unprecedented levels of healthcare reform. Across Europe and the US with debt as a percentage of GDP running at all-time highs, the healthcare systems face the continuous challenge of providing more for less. In addition, consumer engagement is growing with a dawning recognition that patients will need to bear a higher percentage of the cost of their own care. Expectations are also enhanced as patients use the internet to access better and more information than ever before. Corporate restructuring is another key influence, where diversified conglomerates are being forced to determine their core business.

Globally, these pressures are set to increase further as the population ages, the demand in emerging markets develops, and scientific and technological advances increase life expectancy, leaving more people facing chronic illnesses such as diabetes. In the US alone, the number of people over 65 is forecast to grow by 57% in the next 15 years - a clear illustration of this trend.

However, while healthcare spend has grown above GDP in recent years, some of these pressures are starting to bring spending under control. Consequently, we are interested in targets that deliver value for both payers and providers through improving management and processes, shifting the location of care to more cost-efficient locations, or better facilities, technology and service. The three major areas that we continue to focus on are pharma, healthcare services and medtech. Regions showing high-volume growth, such as emerging markets, are particularly attractive where we see large population growth, under-penetration of healthcare and a growing middle class which increasingly desires better and more medical resources.

When we look for investments, we concentrate on three main themes: We identify a clear value proposition for the payer while maintaining high quality standards (Connolly is a great example which is taking costs out of the system for the benefit of the payer); we look for companies with the potential to drive operational improvements and/or buy-and-build strategies and we invest in proven science and technology. We believe this focused strategy helps us to identify unique opportunities like American Heart of Poland (AHP), where future growth is underpinned by specialist care, and Mediq, which offers multiple expansion routes and long-term consolidation.

See our Healthcare investments