Do you really know what private health care really means? Or is someone else telling what it means?
By Melvin J. Howard
The more and more as I get questions about health care mainly private investment in health care. I now realize that the majority of the population do not get that without private investment in health care you just would not be living a more healthy productive life. So in order to educate those whom are really interested in health care on a global scale I have decided to give you a peek at some of the companies and their contributions. To save space and time I purposely left out. Asia, and Europe there are indeed hundreds of others in other countries. I have kept the list short but I have included Canada. YES CANADA has an investment arm in health care oh no call the national guard! Surely you jest no I do not you are benefiting from these investments whether you see it or not. Government cannot do it alone plain and simple changes in disease patterns and technology are so rapid and mobile if you do not keep up with advances you are selling your population short. So the next time you go to your doctor’s office take a look around and wonder how did all those things get there. When I go to the doctor’s office I actually listen to them what could make your job easier or more efficient. I take that into every decision I make.
Corporate strategies in health care are influenced by how private health care companies view potential demand for health care services. Venture capital and private equity capital are two sources of private sector investment that are used to develop private companies, which are not yet publicly listed companies. The priorities for this type of investment can be seen as an indicator of future trends in the private health care sector. An analysis of venture capital and private equity investment priorities in health care will show how health care is viewed by the private sector. An analysis of International Finance Corporation (IFC) health projects highlights the links that exist between sources of development finance, private investors, and health care companies.
COMPANIES AND INVESTMENTS IN HEALTH CARE
| NAME | Country | INVESTMENT PRIORITIES |
| Credit Suisse Global Health care Fund | Switzerland | Worldwide, in mainly large to middle range capital companies - health care |
| Advent International www.adventinternational.com | USA | Early stage venture capital and later stage private equity operations. Target sectors include financial services, business services, specialty retail, chemicals, media, pharmaceuticals, software/information technology, telecommunications, health care/life sciences and energy. |
| MPM capital www.mpmcapital.com | USA | Bioventure and bioequities family of funds including health care innovations |
| Polaris Ventures www.polarisventures.com | USA | Capital partners investing in medical technology and life sciences |
| TA associates www.ta.com/investments/ | USA | A growth capital company that invests in many sectors including health care services and health care technology |
| United Health Capital group www.unitedhealthgroup.com/uhcapital With some capital invested through Validus Partners (United Health Group is a partner). | USA | Invests in 5 venture funds including Validus Partners |
| Newbridge Latin America (NLA) Also Newbridge Andean Partners LP Link to Aqua Investment Texas Pacific Group linked to Oxford Health Plans NAP Acquisition/Newbridge Latin America | USA | Established in 1996 to make private equity investments in Latin America |
| Fidelity Ventures Far East (FVFE) http://www.fidelityventures.com/portfolio/busserv/frameshealth/asia_renal_care.htm encompasses all of Fidelity’s Venture Capital investing activities in Asia. | | Based in Hong Kong, FVFE’s purpose is to extend the reach of US based venture activities to a part of the world that it considers has experienced unusual growth and produced a wide range of investment opportunities. FVFE has made investments in healthcare services, telecommunication services, pharmaceuticals, software development, and consumer service businesses. |
VENTURE CAPITAL FUNDS
| COUNTRY | COMPANY | FUND |
| UK | Independent Care Ltd – private hospital group | Advent International |
| Thailand, Bangkok | Thonburi Hospital Co. – private hospital | Advent International |
| Singapore | Transmedic Pte Ltd, - medical equipment, distribution and renal care services | Advent International |
| US and France | A range of health care companies including Hospital Group of America, Inc, a psychiatric hospital group, which was sold in 1999 to Universal Health Services, a large health care provider with hospitals in the US and France. | TA associates |
| Israel, Iceland, US | 60 companies involved in biotechnology | Polaris Ventures |
| Brazil, Argentina | Salutia – a health care connectivity company. | Newbridge Latin America (NLA) |
| Chile, Brazil, Mexico | International Hospital Corporation | United Health Capital group/ Latin Health Fund |
| Health care companies, particularly biotechnology, biopharmaceuticals, and medical devices | US and Europe | MPM capital |
| Hungary, Poland, Bosnia | Euromedic – leading provider of diagnostic imaging services and distribution and tendering services in hospitals in Hungary | RPM Partners A privately held Dutch investment company GE Equity Dresdner Kleinwert Benson private equity fund |
| Hungary, Poland, Bosnia, Chile, Mexico, Brazil | Euromedic – leading provider of diagnostic imaging services and distribution and tendering services in hospitals in Hungary Hospitals, pharmacies and laboratories in Latin America | Global Environmental Fund |
| Argentina, Brazil | Salutia – a health care connectivity company | UBS Capital Merrill Lynch Global Emerging Markets |
| Philippines, Hong Kong, Taiwan, Japan, Singapore | Asia Renal Care Ltd | Fidelity Ventures Far East (FVFE) |
The main investment areas of equity investments this year are:
1. e-health / health connectivity – use of internet and information communications technologies
2. Telemedicine – using information communications technology to transmit information and advice about treatments
3. Biotechnology – gene therapy
4. Pharmaceuticals – drugs needed for chronic conditions, CHD/CVD, cancer treatments, mental illness
5. Medical devices / diagnostic equipment e.g. treatment for kidney diseases
6. Health care services
Multinational health care companies also invest funding in private investors, for instance, the UnitedHealth Capital group invests in 5 venture funds and some is invested through Validus Partners, of which United Health Group is a partner. UnitedHealth is a health care company based in the US with some international operations.
Some more specific examples of how private equity investment is linked to health care companies are:
- CDP International
- Latin Health Fund
- Asia Renal Care Ltd – Fidelity Far East Ventures
- Euromedic
- Medicover – Oresa Ventures
- Salutia
CANADA CDP INTERNATIONAL - GSSLA
| Caisse de dépôt et placement du Québec (CDP) CDP Capital www.lacaisse.com C$105 billion of assets under management Subsidiaries :
| Three categories of activity:
| CDP Capital invests in public companies (publicly traded shares – “societies ouvertes”) including:
|
| CDP PRIVATE EQUITY Subsidiaries include: | ||
| CDP Capital d’Amerique Financing for medium to large businesses | CDP Capital d’Amerique offer financial services and support to Financial institutions, distribution and services, manufacturing, energy, infrastructures and natural resources | In 2000,CDP Capital d’Amerique in conjunction with BC Partners, made a $89m investment in General Healthcare that manages a network of private hospitals in UK |
| CDP Capital International offers services to Quebec companies involved in international expansion projects CDP Capital International set up – CDP Access Capital International which offers financing arrangements to Quebec companies wanting to operate globally | CDP Capital International invests in funds and directly in growth companies in Europe, Asia and Latin America. It also manages private equity funds in emerging markets in partnership with local teams. CDP Capital International has a portfolio of 56 investments valued at more than C$1.3 billion | CDP Capital International, through Accès Capital International, is investing U.S.$2.5 million in GSSLA Inc., a Latin American subsidiary of Générale de Services Santé N.A. Inc. (GSS), which owns and operates eight long-term health care facilities and senior citizen homes in Québec in addition to offering home care and support services. |
CDP International
Caisse de dépôt et placement du Québec (CDP) International is one of the largest investment companies in Canada. CDP International is one of its private equity subsidiaries. Access Capital International was set up by CDP International. It is investing in GSSLA through GSSNA, a subsidiary of Generale de Sante, one of the largest health multinational companies based in France. GSSNA – North America – operates eight long-term health care facilities and senior citizen homes in Québec in addition to offering home care and support services. GSSLA is a subsidiary of GSSNA and operates in Venezuela and Chile. This presents an interesting example of an investment fund investing through subsidiaries of a multinational healthcare company.
This investment was explained by CDP Capital International’s President, Jean Lamothe who said "The World Bank has identified health care in Latin America as a sector suited for restructuring and development. Our investment, through Accès Capital International, will enable GSSLA to position itself competitively by forming strategic alliances with local partners to take advantage of management opportunities as they arise." (CDP press release, Wednesday December 27th 2000 http://www.cdpcapital.com) GSSLA intends to pursue its development, notably by expanding into Argentina and Mexico over the short term as outlined in 2001.
GSSLA Inc. operates various hospitals and clinics in Venezuela and Chile on its own behalf or for third parties. For example, in 1997 it obtained a contract to manage Venezuela's Coromoto Hospital, a 150-bed multidisciplinary establishment owned by the oil company Petroleos de Venezuela SA. In Chile, GSSLA is the sole manager of the largest private hospital in the country's second-largest health region.
An example of CDP’s investments in European based health care companies can be seen in the investment by another private equity subsidiary of Caisse de dépôt et placement du Québec called CDP Capital d’Amerique. In 2000, together with BC Partners, it made a $89m investment in General Healthcare, a company that manages a network of private hospitals in UK. CDP also has a large property portfolio and has recently started to rent office space in Paris to Vivendi Privately Speaking.
