Initial funding comes from two cornerstone investors:
Baigo will target mid-cap European healthcare companies, with enterprise values of between €40m and €200m. The team is open to providing development capital and funding for buyouts, carve-outs and buy-and-build strategies.
Healthcare is one of the fastest growing and most attractive investment sectors in Europe, partly through the diversity of the European healthcare market, but also due to the nature of the region’s demographics, with an increasingly ageing and affluent target market.
In Europe, the elderly population (over 65) is expected to rise from the current 21%, to around 34% by 2050. The over-80 age group, the heaviest healthcare users, is forecast to more than double from 4% to 10% over the same period. The result will be increased healthcare costs, with expenditure, as a percentage of GDP, expected to rise from 10% of GDP today, to as much as 20% of GDP by 2030. According to Baigo, some of the most dynamic investment opportunities in healthcare include: the acute care sector and related services, especially in markets such as Germany, where it has doubled in size over the last 10 years, and now accounts for 10% of the sector; the deregulated healthcare sub-sectors, which have been benefiting from wider and more effective distribution; technological and organisational innovations, helping to lower the cost of healthcare; and lifestyle healthcare, with consumers increasingly willing to pay premium prices for procedures, such as dental implants, or optical laser procedures.
Baigo’s four founding partners, who are based in Frankfurt, have over 60 years’ experience in the healthcare sector, private equity and investment banking fields, as well as support from a seasoned advisory board with substantial industry experience. These partners are Marcus Bracklo, former head of healthcare investment banking at Sal. Oppenheim; Frank Duffner, former head of healthcare M&A at Sal. Oppenheim; Dr. Dariusch Mani, former senior executive of Schering AG; and Markus Solibieda, former director of 3i PLC.
Members of the advisory board include David Ebsworth (UK), former global head of pharma at Bayer AG; Ulf Fink (Germany), former member of parliament responsible for healthcare reform; Antoine Flochel (France), deputy chairman of the Ipsen Group; Ollii Rikkala (Finland), former CEO of Instrumentarium and senior adviser to GE Healthcare.
Marcus Bracklo, says: “Opportunities in the healthcare sector are immense. To be the first ’pure play’ mid-market specialist in Europe gives us first-mover advantage and the ability to address a very exciting untapped market. There are significant opportunities for the specialised investor, with European healthcare exhibiting above-average growth potential, due to demographic developments, technical and organisational innovation, and benefiting from deregulation, privatisation and healthcare reforms.”