HSBC Asset Management (HSBC AM) has launched the firm’s first healthcare fund focused on sustainability and impact.
The HSBC GIF Global Equity Sustainable Healthcare Fund will be co-managed by Dr. Nathalie Flury and Dr. Michael Schröter, co-heads of sustainable healthcare equity, who both joined HSBC AM earlier this year.
One of the main sustainability challenges facing the healthcare sector today is rising medical costs.
HSBC AM believes that rising costs are straining healthcare systems globally, which results in access restrictions.
Healthcare spending consistently outpaces GDP growth across markets. In 2018, global spending on healthcare reached $8.3 trillion, around 10 percent of global GDP. In the US, which accounts for nearly half (42 percent) of global healthcare expenditure, total spend is projected to increase by over 50 percent in the next eight years alone.
The fund, which is aligned with UN SDG Goal 3, Good Health & Wellbeing, aims to address this challenge and drive social impact without sacrificing on performance.
It will invest in a range of 35-40 companies with a bias towards mid-caps, long-term engagement, low turnover and active management interactions. There will be no fixed allocations across geographies, sub-subsectors, company stages, or profitability.
These companies will have an emphasis on clinical cost savings, aiming to improve healthcare affordability. In addition, the companies will focus on healthcare innovation that can reduce the overall cost for all stakeholders in the system..
This strategy will be made available to HSBC’s wealth clients across its private bank and wealth and personal banking segments, in addition to targeting both wholesale and institutional investors with a particular focus on high-net-worth individuals, family offices and private banks.
Dr. Flury and Dr. Schröter said: “The current healthcare model is not sustainable and patient outcomes are being negatively impacted alongside the industry and investors. This fund aims to address this inequality and invest in companies that are offering different approaches through new treatment options, technology and innovative business models.”
