Greenwood Outlines to Start Hedge Fund to Tap Healthcare Sector in China
Published By : 15 May 2015 | Published By : QYRESEARCH
Greenwoods Asset Management charts plans to start a hedge fund that will tap opportunities in healthcare in China, which is the third largest pharmaceuticals market in the world.
Greenwoods China Healthcare Fund will purchase stocks of key healthcare providers and drug companies, as commented by the manager of the Shanghai based partnered firm that has US$7 billion in assets. The partnership will short stocks of companies that are likely to lose foothold amid the medical reforms in the country.
In China, healthcare spending is projected to grow approximately 12% each year. The spending is expected to reach US$892 billion by 2018. The healthcare sector in China has drawn investors like Hillhouse Capital Management, which is the endowment-backed enterprise of Yale University that partnered with Mayo Clinic and has assets of US$20 billion.
The valuation of stocks is higher than in many sectors. But there are still good opportunities available for sell-off, or prior to the potential of a company being utilized.
The health care index of MSCI China is valued 23 times more than the earnings this year. This is by far the most gauged behind the information technology and consumer staples companies in the country.
China is expected to become the second largest pharmaceuticals market in the world in terms of sales as per data in the first quarter of the year. This is as per report published by consulting firm Bain. In the nation, health issues that are cropping up due to pollution, aging population, obesity, relaxation to have more than one child, and opening up of hospital business to investments from private parties will provide investment avenues.
The newly formed fund that has the ability to short and sell borrowed stocks will set it apart.