The George Institute, an Australian-headquartered not-for-profit which set out to ease the problems associated with new and chronic diseases, often in undeveloped nations, nearly 20 years ago, is looking at how to entice super funds to join the cause. With returns, that’s how. It is targeting very good returns.
A for-profit offshoot of the Institute, George Health Enterprises, is looking at the most appropriate vehicle to tap the growth investment markets of both impact investing and health care.
A group of George Health executives from around the world, plus their Australian counterparts, met last week with potential investors to gauge their preferences. George Health has engaged third-party marketing firm Allen Partners, based in Sydney, to assist.
Impact, which is at the pointy end of the ESG range of opportunities, has struggled in Australia primarily because of scale issues. Super funds are too big to invest in the generally small amounts required in social impact projects. It’s no coincidence that a main contributor in this space is the relatively small $1.4 billion Christian Super.
Stephen MacMahon, the Sydney-based principal director who co-founded the Institute in 1999, says that George Health plans to raise about $130-150 million in “long-term risk capital” to support the growth in its three current health businesses and investigate further opportunities.
What structure it uses – from shares in the main company to funds, to individual mandates or co-investment opportunities – is under discussion.
The three health businesses are: George Clinical, which does clinical research; George Care, which provides digital clinical intelligence through the burgeoning world of patient online monitoring; and George Medicines, which packages various pharmaceutical technologies and commercialises medicinal product.
The parent George Institute has raised about $750 million from philanthropists and governments for its work since 1999 and employs about 600 people in offices in Australia, India, China and the UK. It has had projects in more than 50 countries. It has affiliations with University of Oxford, the University of NSW and Peking University (PKU) in Beijing.
George Health was formed in 2014 to develop and commercialise scalable solutions for non-communicable diseases (NCDs), such as heart disease, stroke, kidney disease, diabetes and hypertension. These are the “new and chronic” diseases which are often exacerbated by demographic changes in underdeveloped countries. The company aims to deliver “competitive financial returns” to investors – and the Institute to build up its own endowment reserves. It is already a revenue generator, the company points out.
MacMahon says the company targets gross earnings of 15-20 per cent and concentrates on scalable businesses with high impact and low-risk products.
“We have a diversified portfolio of established businesses, each with a short-to-medium pathway to market and rapid growth potential,” he says.