Mitigating Currency Risks
We believe that the healthcare and consumer spaces are the most attractive sectors. Part of their attractions stem from their growth outstripping GDP in both emerging and developed markets, but disproportionately more so with the former. Healthcare expenditure will outpace GDP growth over the next 15 years in almost every OECD country, according to new OECD forecasts. According to the Economist Intelligence Unit, Brazilian healthcare spend per head increased at a CAGR of 7.32% between 2009 and 2017 while Brazil’s GDP in nominal terms grew at a CAGR of 2.35% over the same period. According to McKinsey, the African Pharma market experienced a CAGR growth of 14% between 2010 and 2020.
According to Statista, The EU Food and Beverages sector is expected to show an annual growth rate (CAGR 2020-2024) of 7.2%. A 7.3% CAGR in Brazil's food and beverages sector between 2014 and 2024 is expected. Brazil’s Food and beverage sector is responsible for 11.4% of Brazil’s exports, providing the sector to hedge currency risk(US denominated revenues and local currency operating costs.)
We seek to follow a balanced approach whereby we capitalize on both the healthcare and consumer spaces. We expect to invest in companies with an EBITDA margin that ranges from $10m to $50m.
We plan to capitalize on opportunities in fragmented markets that lend themselves to scale or strategic add ons.