CANDRIAM, a global multi-asset manager focused on sustainable and responsible investment has picked World Health Day to launch the CANDRIAM Equities L Life Care Fund (the Fund), a sub-fund of the Luxembourg SICAV Candriam Equities L managed by Candriam Luxembourg.
CANDRIAM, a global multi-asset manager focused on sustainable and responsible investment has picked World Health Day to launch the CANDRIAM Equities L Life Care Fund (the Fund), a sub-fund of the Luxembourg SICAV Candriam Equities L managed by Candriam Luxembourg.
The Fund invests in a global range of health care sub-sectors including pharmaceuticals & biotechnology, medical technology, and life sciences. The Fund is the latest offering in CANDRIAM’s existing healthcare range, which includes specialist health care strategies, representing over USD4.5 billion in assets under management.
Health care is a secular growth theme that benefits from following trends and characteristics:
- Ageing: an ageing population creates a structural demand for all subsectors of the health care industry, as most health care expenditures occur after the age of 60.
- Innovation: health care innovation never sleeps eg the rise of new technologies, better drug design, the genomic revolution and robotic assisted surgery
- Emerging markets: the health care sector is still developing in emerging markets, as access to it and health insurance is continuously improving.
- Low cyclicality: health care is always a necessity and is thus less dependent of economic conditions.
Ageing demographics and economic development are two of the most powerful drivers of health care consumption. The United Nations predicts that by 2050 the global population aged 60-plus will amount to 2.1 billion people, this represents a more than 100 per cent increase from the 1 billion people aged 60-plus in 2017. Furthermore, healthcare spending positively correlates with rising GDP per capita.
While the healthcare sector provides a growth opportunity worldwide, Emerging Markets in particular offers an interesting long-term dynamic. China’s per capita healthcare expenditures, having grown at a Compound Annual Growth Rate (CAGR) of eight percent from 2014 through 2018, are forecast to continue rising at a CAGR of seven percent through to 2023. Per capita spending on health care in China stands at only USD647, compared to that of the US which is 17 times greater at USD11,162 per capita. The country’s ageing population coupled with rising wealth will fuel growth in an under-penetrated market.
The actively managed Fund uses a fundamental, ‘bottom-up’ approach based on – thorough research and deep understanding of clinical data and the developments in medical technology. The fund managers use a differentiated investment process rooted in over 20 years of biotechnology expertise, allowing them to do in-depth clinical assessment of a drug or technology pipeline.
The investment universe consists of quoted companies that are active in the broad health care space, including pharmaceuticals, biotechnology, life sciences, health care equipment and technology, with a market cap of more than USD250 million. The Fund has no specific regional, style, size or disease bias.
The Fund, which is the latest addition to CANDRIAM’s global health care strategy, will be managed by Rudi Van den Eynde, Head of Thematic Global Equity, and Servaas Michielssens, PhD, CFA, both of whom have extensive experience in health care. The fund managers rely on a team of analysts cumulating 28 years of experience in fundamental medical research. Their goal is to ensure the Fund outperforms the MSCI World Net Return benchmark and be well ranked within the peer group of global health care funds. The fund will be registered for distribution in Luxembourg, Austria, Switzerland, Germany, Spain, France, Great Britain, Italy and the Netherlands.
Rudi Van den Eynde, Lead Portfolio Manager of the Fund, says: “This is a very exciting time to be launching Candriam Equities L Life Care, especially thanks to the broad progress we see in medical technologies in general. On behalf of our investors, we will strive to identify companies with a high growth potential across the broad health care spectrum. With its in-depth expertise, and 20 years’ experience managing global health care strategies, our team is very well positioned to capitalise on the latest technologies.”
Vincent Hamelink, Chief Investment Officer, says: “As ageing demographics, economic development and new innovative treatments will further drive the global health care market growth, our new Candriam Equities L Life Care is designed to offer a unique diversification opportunity for investors.”
