Time for the Gulf to take a 'healthier' approach to investments
Less than a year after Ithmar Capital took Al Noor Hospitals Group through the initial public offering (IPO) on the London Stock Exchange, the stock price has gone up around 45 per cent.
The successful listing, which sold at least 38.5 million shares after its debut in summer, is proof that the healthcare sector remains very attractive and there are plenty of opportunities waiting to be tapped by businesses based in the UAE and the rest of the region.
“The beneficiaries of this journey are not just Ithmar Capital or Al Noor, but it’s really the region, because today, international investors are looking forward to other successful investment firms to come up with opportunities and give them additional exposure, because the trust today in the healthcare sector has gone up significantly. This is something we all have to capitalise on,” said Faisal Bin Juma Belhoul, founder and managing partner of Ithmar Capital and vice chairman of Belhoul Group UAE.
Belhoul was one of the panelists at yesterday’s Healthcare Investment Middle East and North Africa (Mena) which tackled investment opportunities in the region’s medical sector.
Experts at the forum said the growing demand for healthcare services in the UAE offers a lot of opportunities for private investors to profit from, not just in the hospital space but also in a number of support and related businesses. Aside from floating an IPO, successful ventures include opening or consolidating diagnostics imaging services, specialist and healthcare support facilities.
Significant growth forecast
According to a Colliers International report, the healthcare sector in the region is forecast to grow significantly on the back of high population growth rates, introduction of compulsory health insurance by a number of regional governments, continued growth of regional medical tourism and heavy reliance on imported medicine and medical equipment, among others.
Colliers estimated that high quality, efficient private hospitals alone could achieve 15 per cent to 20 per cent net profit margins.
The value of the UAE’s healthcare market is forecast to reach Dh3.5 billion to Dh4 billion by 2018. However, the report noted that the country currently faces a shortage of doctors, nurses and hospital beds, highlighting the need for investors to invest more.
For those who don’t know the sector well, experts said they can start a generalist, low-risk business instead of opening a specialist clinic or a hospital. Nabil Kassem, managing director of Gulf Capital UAE, said they entered the healthcare market by first investing in diagnostics imaging.
The company’s portfolio company, Techno Group Investment Holdings, recently acquired a 75 per cent stake in Dogu Tip, one of the major players in Turkey’s outsourced imaging services market.
“Diagnostics imaging is a place where small investors could get the funds to start a business in the healthcare sector. Typically, diagnostics imaging labs are the first points of entry for any patient seeking treatment. Once the patient goes to the doctor, the doctor refers to either a series of lab tests or X-rays, MRIs, CTs, ultrasound. That is a place where you can catch a lot of patients,” Kassem said.
Imad Ghandour, managing director at CedarBridge Partners UAE, said the healthcare market is still very much fragmented and there’s plenty of opportunity for investors to consolidate small players. “Until now, most people look at healthcare as hospital. It’s like when you look at retail and you only see Carrefour. However, besides Carrefour, [or hospitals in the medical industry] there is a lot of businesses where you can invest in,” Ghandour said
- An impending frenzy? Liberalization of Saudi stock market to usher 'new era' in GCC investments
- Eyes on the Cityscape: Mongolia, out of all places, is set to woo Middle East investors
- The rise of dollar: aka the downfall of oil markets?
- You don't need to be Muslim to practice? Why Goldman Sachs' sukuk sales worked so swell this around
- Erdogan's ready to smear the banks: is Turkey about to face a financial crisis worse than that of 2001?
- Shefa HealthCare Fund to invest in healthcare providers and ancillary services in the MENA region
- Gulf Capital Acquires 75% of TechnoScan, the Largest Chain of Medical Diagnostic and Imaging Centers in the Middle East
- Al Qudra Holding partners with National Holding
- TVM Capital MENA announces start of Investment Operations of Shari’a-Compliant Healthcare Growth Capital Fund, with First Close of $40 million
- Shefa Healthcare Fund to manage major investments in regional healthcare sector