TVM Capital Plans $200m Investment In UAE Healthcare Portfolio

Dubai-based private equity firm TVM Capital Healthcare Partners plans to invest $200 million over the next four year to expand its companies across the Gulf Arab region and India, its chairman told Reuters.

The private healthcare-focused firm has made four investments in the United Arab Emirates since 2009 through its $120 million fund to provide specialised services in collaboration with western partners including Germany’s Provita and Britain’s Bourn Hall International.

Its fifth investment, a majority stake in Egypt’s Ameco Medical Industries, will be finalised shortly, said Helmut Schuhsler, who is also TVM’s chief executive.

“Our growth plan is to build these companies into strong entities in the UAE and expand into the other Gulf markets and beyond,” said Schuhsler, identifying entry into Saudi Arabia, Qatar and Oman as immediate targets for expansion.

Healthcare in the Gulf region is experiencing a boom as rising wealth means that more individuals are affected by “lifestyle diseases”. For example, five of the six Gulf states are in the global top 10 for prevalence of diabetes.

The market is projected to grow at 12 per cent a year to $69.4 billion by 2018, from an estimated $39.4 billion in 2013, according to investment bank Alpen Capital.

FUNDRAISING OPTIONS

TVM will need about $200 million of growth capital in the next three to four years, Schuhsler said, adding that fundraising options include a second fund inviting the participation of co-investors or stock market listings.

Some UAE healthcare companies have already trodden the capital markets route. Abu Dhabi-based NMC Health and Al Noor Hospitals both listed on the London Stock Exchange in the past two years and have since traded well above their debut share prices.

“There’s an increasing interest in the healthcare sector and if you reach a certain size you can take companies public,” Schuhsler said, adding that he expects to take all four UAE entities public by 2018 if the market opens up for smaller companies.

Expansion is under way at all four businesses, Schuhsler said, including a significant increase in bed numbers and new facilities in the Northern Emirates – the five emirates other than Abu Dhabi and Dubai which make up the UAE.

One of the companies, in vitro fertilisation (IVF) chain Bourn Hall International, has expanded into India with two centres and up to $40 million will be invested next year to expand operations in the country.

“By 2020 we would have invested in at least 20 companies across the Middle East, North Africa and India. Our game plan is to build brands and expand in the region,” Schuhsler said of their medium-term prospects.