Healthcare-focused Quadria spots opportunities after raising hard-cap

The Singaporean firm held the final close on Quadria Capital Fund II on $595m after raising its hard-cap from $500m, managing partner Abrar Mir tells PEI.

Quadria Capital, a Singapore-based healthcare firm with more than $1.8 billion of managed assets, has reported an uptick in corners of the market amid the coronavirus epidemic.

The firm held the final close on Quadria Capital Fund II on $595 million last month after raising its hard-cap from $500 million, managing partner Abrar Mir told Private Equity International.

Quadria had initially sought $400 million and expanded the fund to include a few additional investments following demand from existing limited partners, he said.

Healthcare strategies could be net beneficiaries of coronavirus, which is on the verge of becoming a global pandemic following more than 3,200 deaths and 95,000 confirmed cases worldwide.

“Some parts of the healthcare industry have benefited dramatically,” Mir said, pointing to heightened demand for medical equipment, testing and drugs for the immune system as a result of the outbreak.

“Counterintuitively, some hospitals have had a slowdown as people are more conscious of visiting them right now.”

The Hang Seng SCHK Mainland China Healthcare Index, which reflects the performance of Chinese healthcare companies listed in Hong Kong, has climbed around 16 percent since 4 December.

Quadria’s portfolio includes hospital networks in India and Vietnam, as well as several pharmaceutical businesses across South and South-East Asia, according to its website. Quadria Capital Fund I, a $300 million 2013-vintage, has made nine investments and is “very actively” exploring exit options, Mir said, declining to comment on specific investment performance.

Investors were content for Quadria to raise Fund II’s hard-cap provided it would not diminish the availability of co-investments opportunities, he added. The majority of limited partners were headquartered in US and Europe.

The firm partnered with Dutch banking group ING in October to receive the world’s first capital facility with an interest rate linked to sustainability performance for its Fund II. The $65 million, three-year revolving facility will peg the interest rate to ESG targets at the portfolio company level.

“At every level, this facility is not a gesture,” Mir said. “The sustainability metrics need to be demonstrated very clearly and are audited. There’s potential for enormous social benefit and significant financial benefit as meeting its objectives would lower the cost of borrowing.”