Manila-based lender Asian Development Bank (ADB) is injecting up to $60 million into a new private equity fund that will invest in healthcare companies across Asia.
In a statement on Friday, the lender said the fund aims to provide affordable and high-quality healthcare for developing countries in the region. The fund will be managed by OrbiMed Asia Partners II LP, a global investment firm dedicated to the healthcare sector with about $10 billion of assets under its management, it said.
OrbiMed established its first pan-Asia health care private equity fund in 2008 and is now aiming to raise $300 million in capital to be invested in health care companies across Asia.
A substantial portion of portfolio investment is expected to be placed in China and India, including rural and second- or third-tier cities in those countries.
The fund is targeting sectors such as pharmaceuticals, medical devices and diagnostics, hospitals and health service providers, and contract research or manufacturing companies.
ADB said that providing affordable and high-quality healthcare is an increasing challenge for the region’s developing countries, particularly because of its unique patient and healthcare dynamics, including lower affordability, high prevalence of certain diseases, geographical dispersion, and urban and rural inequalities.
“Healthcare is a specialized sector with limited participation across mainstream institutional investors, particularly in Asia,” said Todd Freeland, Director General of ADB’s Private Sector Operations Department.
As one of the anchor investors in the fund, Freeland said that ADB will help catalyze additional investments in healthcare companies and sub-sectors that are envisioned to improve the delivery of healthcare goods and services at higher quality and lower cost.