Health insurance and nutrition are areas of great interest to us: Quadria Capital

Quadria Capital, a private equity firm specializing in healthcare, announced on May 6, 2024, that it will invest Rs 850 million in Nephroplus, India’s largest dialysis company.

Quadria currently has $800 million in funding to invest in healthcare opportunities in India and across Asia, with assets under management (AUM) in India of $1.4 billion, including Maxivision Eye Hospitals, Medibuddy, Encube Ethicals, It has invested in companies such as Akums. Pharmaceuticals and Pharmaceuticals and Strand Life Sciences.

During the interaction with money controlSunil Thakur, Partner and Head of South Asia at Quadria Capital, spoke about emerging areas of interest for healthcare-focused investors, including health insurance, wellness and nutrition.

Edited excerpt:

What is the rationale for investing in NephroPlus and what are your company’s growth plans?

The rationale for this comes from both the market potential and NephroPlus’ leadership position in multiple countries, particularly India. The dialysis market is large and growing across India and other emerging markets in Asia. Kidney failure is an important public health problem. However, the causes of premature death in developing countries like India remain largely undocumented. We invest in companies with differentiated capabilities that offer optimal price and quality value propositions tailored to the needs of a variety of price-sensitive market segments in emerging countries. Additionally, we have demonstrated our ability to execute at scale with successful playbooks.

Looking at the current health services landscape in India, is your investment strategy focused on single specialty hospital chains? Do you intend to invest in multi-specialty chains in the future?

We typically focus on a single specialty because of the benefits this model offers, including full stack offerings, top-notch clinical talent, and a virtuous cycle of tools and processes to serve large numbers of single-care patients. I’ve put too much emphasis on it. Having said that, multi-specialty chains have their own appeal and will attract interest from investors, including us.

What new areas are you considering investing in? Is health insurance an attractive opportunity for you? Would you also look at areas such as health/nutraceuticals?

As a specialized healthcare fund, we continue to test trend lines across healthcare segments and evolve our investment focus segments. As part of this, we will come up with new segments where we believe there will be extraordinary growth and a shift in the profit pool. Currently, we are focused on models and businesses related to localization, integration and institutionalization, outsourcing, consumer healthcare, and large-scale digital healthcare themes. As part of this, as you have pointed out, areas such as health insurance and health/nutrition are areas of high interest to us.

The pharmaceutical industry has seen a surge in investment in API and CDMO businesses since the coronavirus outbreak. What prospects do we have there? Has the China+1 theme worked for Indian pharma companies?

The outlook remains positive given the potential of domestic and international markets. Although the China+1 strategy has not evolved as originally envisaged, in the medium to long term many global companies will de-risk their manufacturing presence and the benefits will accrue to India. we believe.

What do you think about the Production-Like Incentive (PLI) scheme in the pharmaceutical sector?

PLI schemes have been very successful not only in the pharmaceutical sector but also in medical devices. It is attracting significant investment from Indian pharmaceutical and medical device companies in both greenfield and brownfield fields.

How do you assess the regulatory landscape and potential regulatory changes impacting the Indian healthcare sector?

Overall, the regulatory landscape is starting to become more progressive and predictable. Having said that, there are some areas in the healthcare sector that we believe could use more market-driven pricing and policies to attract more investment.

What is your track record of exiting India? How much are your current assets under management in India?

We have a strong exit track record in India, having exited more than 8 investments over the past 10 years, delivering approximately 3x return on investment. Our Indian assets under management are $1.4 billion.