Actis signals healthcare push

A $32m investment in a Sri Lankan hospital chain speaks to the firm's desire to put more emphasis on healthcare deals.

Emerging market firm Actis has invested $32 million in Asiri Group, a Sri Lankan private hospital group, it said in a statement. Actis’ Asanka Rodrigo and Viraj Mahadevia will join the company’s board.

Due to the rising middle classes in emerging markets, Actis said the demand for good quality healthcare was increasing and creating good investment opportunities. 

“The rise of lifestyle diseases and increasing household income has created demand for high-quality healthcare provision which supplements government led services,” JM Trivedi, head of South Asia at Actis, said in the statement.

“Sri Lanka’s government and private sector healthcare already compares well with its emerging market peers. Asiri is the clear leader in the country due to its best-in-class doctors, staff and infrastructure. It makes a great addition to our portfolio,” Asanka Rodridgo, a director at Actis, said.  

Actis noted it has invested in healthcare for the last 20 years. In 2006, Actis invested in Sterling, a large hospital group in the Indian state of Gujarat and in Veeda, an Indian clinical research company. 

We are putting more emphasis in general on healthcare … and would like to do more healthcare investments across Asia, Africa and Latin America.

Jonathon Bond

It's not just emerging markets where healthcare is attracting private equity interest; in the West, tight government budgets and aging populations are compelling private investment. The value of private equity healthcare deals globally doubled to $30 billion in 2011 from the prior year, a study from Bain & Company, a consulting firm, concluded earlier this year.

The study named the US and Europe as the main regions for private equity healthcare deals, noting regulations limiting foreign investment prevented some activity in emerging markets.

However, Actis said that regulations were not something they find as a constraint. “The deal flow in the healthcare space is at the moment very strong across emerging markets,” Jonathon Bond, head of investor development and a partner at Actis, told Private Equity International. “We see quite a strong demand for capital and some very successful companies in this space,” he said.

“We are putting more emphasis in general on healthcare, we have got a team that is dedicated to healthcare and we would like to do more healthcare investments across Asia, Africa and Latin America,” he added.