Private equity investment in healthcare continues to grow in the GCC

Published June 3rd, 2010 - 12:19 GMT

Despite suffering at the hands of the recent global financial crisis the healthcare industry seems to have fared better than many other industries. The WHO’s latest estimate of global healthcare expenditure estimates a total of US $4.7 trillion. In the GCC, estimates from various sources indicate around 75 to 132 new hospitals will be built with a combined construction value of US $ 17,917 million in the near future. Private equity investment firms, both regionally and internationally based, are continuing to acquire strategic or controlling stakes in highly profitable and fast growing healthcare companies in the Gulf region and, through active ownership, accelerate their growth and profitability ahead of an eventual exit.

During his lecture at the Investment and Finance Conference that took place during the second annual Hospital Build Middle East Exhibition & Congress on the 3 June, 2010, at the Dubai International Convention and Exhibition Centre, Mr Imad Ghandour, Executive Director, Gulf Capital Pvt. JSC, UAE, spoke about GCC private investment and private equity investment within the healthcare sector. His lecture included analysis of the private equity investments in healthcare across the MENA region with a look at the particular focus areas for private equity investments and as well as the future outlook.

Based in the Emirate of Abu Dhabi, the capital of the United Arab Emirates, Gulf Capital is a leading alternative asset management company focusing primarily on late-stage control buy-outs, growth capital and real estate development.

“While there was a severe drop in private equity investment across all sectors and across the globe in 2009, private equity funds still have billions of dollars that they are willing to invest in healthcare,” explained Mr Ghandour. “Healthcare is the number one sector of interest for private equity firms in this region, followed closely by industry sectors such as education and energy. The high return expectations can limit private equity options as we are looking for high growth potential in revenue and profit, in excess of 20 per cent. Stability is also an important prerequisite as we look to invest in tested business models and in industry sectors with low regulatory interference.”

Private equity investment firms operating in the GCC have high interest in investing in diagnostics, pharmacies and generic pharmaceuticals. Gulf Capital recently partnered with GE Healthcare to acquire 75 per cent of Technoscan, the largest private chain of imaging centres operating in Egypt. With population of around 79 million, Egypt is the second largest healthcare market after Saudi Arabia. Healthcare spending in Egypt has increased by 22 per cent in 2009 and is expected to continue on this trajectory as a result of aging population, alleviated health awareness, increased incomes, and most importantly increased incidences of lifestyle diseases.

Running along side the Conference is a major exhibition, organised by the creators of Arab Health, IIR Middle East, featuring 70 exhibiting companies from 18 countries. The three-day event will bring investors, commissioners, backers and managers of major healthcare building projects together with planning, design, building, operations, management and refurbishment suppliers.


The three-day Hospital Build Middle East Exhibition & Congress will close today, Thursday 3 June.

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