Dubai-based Amanat is expecting to see unique opportunities emerge across the GCC healthcare sector by the end of 2020 and early 2021.
The firm is actively looking at opportunities across a broader investment landscape where sectors intersect with digitization and special situation opportunities.
‘The healthcare sector has been the central focus since the pandemic. Like many other sectors, we expect further growth in the near term to be driven by a consolidation of existing players,’ said Dr Mohamad Hamade, CEO of Amanat.
Healthcare companies in the region had to rapidly implement digital capabilities since the start of the pandemic. The sector needed to adapt swiftly, and the winners are those that can augment and complement their conventional offering by adopting new technology at scale, coupled with solid legal and financial fundamentals.
‘We remain optimistic about healthcare growth in the GCC, particularly in providing capacity in under-supplied specialties and continuing to improve standards of care through digitization,’ Hamade said, adding that within the GCC, Saudi Arabia is a particularly attractive market for private operators.
The primary growth drivers include population growth and changing social dynamics, emerging lifestyle diseases due to a growing middle-income population, and the growing demand for specialty clinics.
According to GlobalData, Saudi Arabia has the region’s highest number of healthcare projects under execution. Collectively, healthcare projects under execution in the Middle East and Africa region are valued at $45bn, followed by pre-planning and planning schemes worth $23.8bn.
Across the board there is a continued focus on specialization, but more importantly on the digitization of healthcare which has been accelerated as a result of the pandemic.
Technology has in fact been a major catalyst in increasing accessibility and affordability of healthcare in the region. Already on the rise, the pandemic further pushed providers to increase their focus and pace of adoption, particularly focusing on telehealth and telemedicine services.
Amanat, which has an authorized capital of AED 5bn ($1.4bn) and has invested in three major healthcare institutions in the region, has observed a large-scale spike in patients connecting with doctors over video consultation across its portfolio of companies and other players in the market.
Some have even gone a step further to increase their market reach by offering home services that range from lab tests, vaccinations, nursing care and physiotherapy.
This trend is here to stay, Hamade said. ‘We are at the early stages right now of a long-term shift in healthcare towards digitization.
‘I see us becoming accustomed to this type of technology and in the near-term we will experience a hybrid model of technology and traditional doctor visits,’ he added.
Amanat’s healthcare portfolio has seen the expansion of homecare, telemedicine, and emergency response services and the utilization of daytime care.
‘The majority of the obstacles that our portfolio companies faced were transitionary in nature but many of these challenges helped strengthen operations for the future,’ Hamade said.
Looking forward, Amanat’s portfolio management teams are working to identify which trends look set to impact performance throughout the rest of the year.
The company aims to grow and build resilience and adaptability within its portfolio companies to position themselves for suitable exit opportunities as they arise. It plans to watch the market for special situation opportunities that arises out of the current pandemic.
‘It is clear the healthcare sector has proven to be defensive in nature in adaptability, and in its immediate return to normality after one of the most abrupt pauses in contemporary history and as soon as restrictions were lifted,’ he concluded.