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HealthInvestor Summit 2019

HealthInvestor UK’s editorial team bring you the highlights from the 2019 Summit

The HealthInvestor UK Summit 2019 held last month in London proved a great success with a packed programme full of compelling, informative and engaging content.

After a welcome from Investor Publishing managing director Vernon Baxter, George Parker (pictured) delivered a fascinating keynote address from his perspective as political editor of the Financial Times.

Parker gave an incisive analysis of the complex and confused political landscape ahead of the coming general election and what it all might mean for the investment community. Interestingly, he observed that for Labour to be able to form a coalition government with minority parties, all the Conservatives had to do was fail to win an overall majority.

This was followed by Julian Evans of Knight Frank who gave a comprehensive overview of the healthcare property market, highlighting the numbers and values of deals across the sector in the last year.

The morning’s debate centred on the perception of private health and social care provision in the UK. David Hare of the Independent Healthcare Providers Network, John Ransford of HC-One, Nigel Sibley of LifeCare Residences and Jane Townson Philpott of the United Kingdom Homecare Association all contributed useful insights into the issue with key themes of political and ideological opposition, reputation management, communications and staff investment emerging.

The morning panels kicked off with a discussion on the challenges of an ageing society with contributions from Robert Kilgour, the original owner of Four Seasons Health Care and now executive chairman of Renaissance Care, Mike Parish chair of Care UK and James Thorburn, chief executive of City and County Healthcare Group.

Thorburn stressed the crucial role of emerging technology in tackling the challenges facing the domiciliary care sector. By deploying technology to measure care outcomes at delivery, much more could be done with existing resources and funding, he said. The other panel members agreed that more could be done to improve efficiency and target care across both the residential and home care sectors but that the role of central government was crucial in addressing funding models to deal with growing demand.

Parish spoke of his experience of advising policy makers on social care and remarked the subject of reform was a political minefield which ministers were reluctant to enter ahead of a general election.

The second panel tackled the issue of whether the private hospital market can buck the trend of stagnant private medical insurance and inconsistent levels of NHS referrals.

Angela Evans of Ramsay Healthcare UK, Adrian Stevenson of One Healthcare and Wouter Van den Brande of Nuffield Health had a stimulating and informative discussion raising the issues of how self-pay is taking a higher priority in their companies. Diagnostics was seen to be another crucial area for revenue generation as patients wait longer for NHS hospital appointments and are often happy to self-pay to get a diagnosis more quickly.

Panel three looked at how the middle market in the care home sector was being squeezed between the premium end of the sector and the state-pay lower end. Andrea Auteri of Elevation Advisers, Gordan Cochrane of Healthcare Homes Group, Andrew Cowley of Impact REIT and Justin Hutchens of HC-One were all of the opinion that quality was the key to success across the piece and investment in both staff and the built environment was paramount.

Next, Lynn Fearn and Kevin Groombridge of Healthcare Management Solutions gave some expert advice on how operators in the health and social care sector should deal with coroner’s inquest should a patient or resident die in their care. Both stressed the need for exemplary record keeping and full co-operation with the
authorities as well as seeking early legal advice and taking steps to manage possible reputational damage.

The panel on the rise of multi-site healthcare plays for the diagnosis and treatment of ‘lower priority’ conditions where NHS services either do not exist or are limited, was particularly interesting. Simon Devane of Pure Sports Medicine, Kayleigh Hartigan of Zava, Allan Johnson of The Dermatology Partnership and Praful Nargund of Create Fertility all explained their companies’ offerings and the particular challenges and opportunities facing operators in this growing market sector.

Finally, some key independent sector leaders gave their views on working in partnership with the NHS. Richard Bradford of InHealth, Jim Easton of Care UK, Matt James of PHIN and Vivienne McVey of Virgin Care all agreed that the NHS and its patients benefit from partnerships but that sometimes working with the heath service could be a challenge given a degree of opposition to private sector involvement. The possibility of reduced or cancelled contracts in the event of a Labour government coming to power was discussed but the consensus was that this would be difficult to implement in practice.

The stream dedicated to investment was this year sponsored by Bevan Brittan, and the firm’s Vincent Buscemi opened proceedings with a variety of insights he and his team have picked up from the marketplace. David Sanders of Results Healthcare – previously of DC Advisory – then gave a comprehensive outline of deal activity in the health and social care sector. Most striking was his illustration of the number and volume of unrealised private equity investments in the healthcare space, showing deals with a hold period of approaching a decade. This was contrasted with the weight of capital seeking to enter the market, with different forms of long-term capital targeting the healthcare space. 

Sanders’ presentation was followed by a panel session chaired by Bevan Brittan’s Monica Macheng. Apposite Capital’s David Porter, Garret Turley of August Equity and David Torbet from Bowmark Capital shared insights on the role of private equity in UK health and social care. In a wide-ranging conversation, the panel focused on sector hotspots, emerging trends and their respective investment strategies. The panel made clear that they saw the arrival of other types of capital – such as infrastructure investment – as an opportunity, rather than a threat to their preeminence in the sector. 

After lunch, Bevan Brittan’s regulatory expert Carlton Sadler gave an in-depth analysis of the various types of regulations investors need to be aware of – from generic to service-specific regulation, accountability, company structures and what to look out for in a due diligence process. His presentation also considered the increasingly important role played by the Care Quality Commission’s market oversight team – especially in a market where provider failure is a genuine threat. 

The following panel session featured a range of individuals looking to deploy capital into the health and care market. Paul Bridge of Civitas Housing Advisors explained his investment theory for the market, while Downing’s Mark Gross outlined the ways in which growth capital can help managements teams accelerate their growth and realise their potential. Dasos Kirtsides from Shawbrook also shared his experiences of founding a specialist healthcare team at the challenger bank, explaining the criteria and qualities they’re looking for in the marketplace. 

The afternoon came to a close with two different panel discussions – one examining the impact of infrastructure funds in the specialist care market, the other bringing together some of the most ‘plugged-in’ advisors in the sector to talk about market confidence, vendor expectations and asset pricing. The infra panel featured AMP Capital’s Ruben Bhagobhati, Peter Moore of iCon Infrastructure Fund and Clare Connell of Connell Consulting, who advised on a number of transactions involving these market entrants. The closing session featured Andrew Nicholson of KPMG, David Jones of Deloitte, Tony Drabble of EY, Issy Corbett of PwC and Matthew Lee of Lincoln International. 

Real estate
The sessions dedicated to the healthcare estate started with a bang, with a dynamic panel chaired by Knight Frank’s Mandip Bhogal. Featuring a range of real estate professionals – from developers to architects to retirement village operators. The central question to the panel focused on ‘what it takes to develop a 21st century care home’ and views ranged – but all agreed that technology, fit for purpose buildings and quality of care were the main ingredients required. 

Knight Frank’s Kieren Cole then interviewed Sunrise Senior Living’s chief executive Natalie-Jane Macdonald and Andrew Long of Oakdale Care Group about the drivers underpinning the self-pay sector. With a vast amount of the UK’s housing equity sitting with the elderly population, the market for self-pay care is proving to be sustainable and capable of generating strong returns. However a lack of appropriate stock and pockets of geographic oversupply is placing pressure on the market, the panel felt. 

After lunch Octopus Healthcare’s Kevin Beirne chaired a retirement villages panel, featured Audley’s Nick Sanderson, Honor Barratt of Birchgrove, Nigel Sibley of LifeCare Residences and sector newcomer Will Bax of Retirement Villages Group. As a market, housing with care has long threatened to be the breakout asset class in UK healthcare real estate. The panel felt the arrival of institutional capital, changing models and public perceptions meant that the time for retirement villages is now. 

The stream then took a short break from all matters real estate and Andrew Taylor of Aldwych Partners focused in on the subject of competition – a major issue for certain parts of the health and social care sector in recent years. Taylor outlined how the regulator can intervene in markets and outlined what investors needed to do to mitigate against these risks. 

The real estate session closed with an in-depth presentation from ARCO’s Michael Voges, who returned to the topic of housing-with-care. In his session he outlined how the UK was seeing a growing number of new operators, backed by an increasing number of large scale and institutional investors. With value creation increasingly shifting towards long-term operations, he asked what impact this would have on investors, operators and the economic and regulatory eco-system for housing-with-care.

To kick off the Innovation Forum, Dr Matt Wilson, chief executive of uMed, examined different approaches to digital patient engagement. In the presentation, titled Engaging with Patients in a Digital Age, Wilson outlined the ways health tech companies both in the UK as well as overseas, are innovating ways to improve engagement, outcomes and costs. After the presentation, his colleagues Abi Balmer, head of growth, and Ian Wootton, board advisor, took questions from the buzzing room, fueling a discussion on why there is so little health tech in the UK compared to the US. To answer the latter question, the team said it comes down to the willingness to invest and money going into innovation in this space in the UK. 

Next, Ploy Radford, consultant at PLMR, sat down with Neil Lloyd, chief executive of Dental Partners, to explore the opportunities and risks in the UK dental market. During this fireside chat, Lloyd outlined the key challenges facing operators in this field, including recruitment and retaining staff, as well as striking the balance between NHS and private offerings. Lloyd added that dental practices are never short of patients but recruiting enough dentists to meet the demand, and generate revenue, can be a challenge.  

After lunch, Alex Ramamurthy, founder and chief executive of Mirthy, chaired a panel in the Innovation Forum titled Digital Age: The role of technology in the elderly care sector, uniting Sam Hussain, founder of Log My Care, Adam Hutchison, managing director of Belmont Sandbanks, and Navin Mayani, chief executive of the Care Innovation Hub. The panel explored how the care sector is starting to innovate and welcome the use of technology, albeit slowly, and how health tech can change the investment proposition in care for the elderly. 

Following the engaging panel discussion, Matthew O’Kane, managing director at Nexus Investments, offered insight into what makes a health tech company attractive to venture investors. In the presentation, Unicorn Spotting: Unlocking success in health scale-ups, O’Kane explored the current state of venture investment, including the companies backed by Nexus Investments, as well as the dos and don’ts of investment proposals.  

Following a networking break, the Investment Forum returned for the last panel of the stream with a session titled Innovation and Entrepreneurship: Transforming the poor stigma in social care. Chaired by Mayani, of the Care Innovation Hub, invited some young entrepreneurs with innovative ideas to transform the care sector to talk about their start-ups. The audience heard from Michael Broadley and Tim Chapman, co-founders of Team Hoot, Ty Hassan, founder and chief executive of Streamcare, Maaha Suleiman, founder and chief executive of Pamoja Care, and Olly Webb, founder and chief executive of Crunch. After the brief presentations, the panel discussed how innovation can transform the conventional market to improve outcomes and the lives of people receiving care in the UK.

Posted on: 28/11/2019

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