Healthcare groups bring expertise and innovation

Healthcare groups bring expertise and innovation, photo illustration/Source: freepik.com

Following the strategic partnership with FPT Long Chau earlier this year, IHH Healthcare Singapore, the largest private healthcare provider in Singapore, is exploring new opportunities in Vietnam.

Jeffrey Law, chief commercial officer of IHH Healthcare Singapore, said the company is constantly looking for like-minded partners. “It is important to us to support patients who want to seek care in Singapore, and for those who cannot do so due to affordability or mobility, to access high-quality care in Vietnam. We do not have an operating model in mind yet, but we are actively looking for opportunities to engage more deeply with the local market,” Law said.

“While we are seeing rapid growth in the number of new hospitals and medical centers, the number remains small relative to the size and demand of the market. The under-penetration of health insurance also signals growth potential, as this is likely to change as the market matures. Increasing insurance penetration will open up access and could catalyze growth in health care services,” Law added.

The healthcare sector continues to be an area of ​​interest for Singaporean investors, supported by key transactions such as Thomson Medical Group’s acquisition of a controlling stake in FV Hospital for over US$380 million, and Raffles Medical Group’s strategic partnership agreement with a local investor to acquire the operations of American International Hospital, valued at approximately US$46 million.

In addition to healthcare companies, Singaporean private equity firms are also eyeing Vietnamese healthcare assets. Earlier this year, Singaporean private equity firm TVM Capital Healthcare invested in Vietnamese eye care business Alina Vision. The investment provided growth capital to support a specialist eye hospital network that reaches underserved Vietnamese communities.

The investment is in line with TVM Capital Healthcare’s goal of providing more affordable and high-quality healthcare services, including those that have a strong impact on women’s health. Alina Vision provides treatment for cataracts, the leading cause of blindness among people over 50 in Vietnam, which mainly affects women.

Hoda Abou-Jamra, Founding Partner and Managing Director of TVM Capital Healthcare in Southeast Asia, said: “We will continue our active involvement in the Vietnamese healthcare sector, with teams based in Ho Chi Minh City and Singapore. Our aim is to bring expertise, support innovation and make high-quality services accessible to more people.”

Similarly, Singaporean investment firm Sweef Capital made a strategic investment in Vietnamese company USM Healthcare to increase access to affordable medical devices and orthopedic products.

Jennifer Buckley, Singapore-based Managing Director of Sweef Capital, said: “We are excited about what we are seeing in Vietnam. Sweef Capital was founded to support local businesses in the Asia Pacific region, and Vietnam is a priority market for us because of the dynamic leadership and innovation we see there. We have a strong background in healthcare, which aligns well with our focus on impact investing, targeting well-run businesses in industries that employ a large number of women and deliver strong social benefits as well as strong financial returns.”

Vietnam’s healthcare sector is set to see record high investment in 2023, with year-on-year growth of 391 percent, making it the most funded sector, according to a report released by the National Innovation Center and Do Ventures in April. In April, Singapore’s wealth fund GIC Pte doubled its investment in Vietnamese pediatric and maternity clinic operator Nhi Dong 315.

Apart from this agreement, there have been few announcements in the first half of 2024.

TVM Capital Healthcare’s Abou-Jamra said the current decline in deals is more of a short-term correction than a reflection of waning interest.

“The fundamental attractiveness of the Vietnamese healthcare market remains strong and we expect to continue to see solid investor interest. The slowdown in deal activity in the first half of 2024 is part of a broader trend in Southeast Asia, largely related to the current fundraising market,” Abou-Jamra said.

In addition, the high valuations achieved in 2023 have set ambitious expectations for sellers this year, inconsistent with current investor demand. Naturally, this has led to a temporary lull as the market adjusts. TVM Capital Healthcare expects transaction activity to increase as market conditions stabilize and valuations become more in line with investor expectations.

“Southeast Asia is not immune to the economic headwinds experienced elsewhere, but we remain very optimistic about Vietnam’s healthcare performance,” said Sweef Capital’s Buckley. “This is due to continued innovation to address unmet medical needs. Despite recent macroeconomic considerations, leading healthcare companies continue to allocate capital to innovative service offerings, delivering significant improvements in Vietnam across both the public and private sectors.”

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