Healthy Outlook for Investment Landscape in Region
Private equity experts in the UK have painted an optimistic picture of the investment landscape for medical technology companies in Yorkshire.
Research carried out by the Investing in Health team at Grant Thornton, polled a panel of investment managers from private equity funds which have invested in the healthcare technology sector in the last 12 months. The research revealed the trends and predictions in the venture capital market for the year ahead, and showed that there is still an appetite for investment particularly in medical technologies.
Yorkshire is well-placed to capitalise on this as it is home to the highest concentration of medical technology companies in the UK, along with 11 universities attracting over £380m of research income.
Within medical technology, the panel of experts identified imaging and diagnostic companies as a key focus for investment as a result of the drive towards personalised medicine. Telehealth technologies are also proving popular with investors as the trend for remote monitoring and reduced clinical contact increases.
Dental products represent a changing market for investment. With the increase in private payment for dental work there is a growing market for reconstructive and restorative treatments. Companies such as Harrogate-based Neoss Ltd are seen as opportunities to watch by investors with an interest in this field.
The growing interest in orthopaedics and wound care is also encouraging for Yorkshire which has a number of companies operating in these sectors. It was felt by those polled that Smith & Nephew’s influence on the region in terms of attracting and retaining a skilled workforce in these areas has helped to boost innovation.
Lisa Ward, manager of the Investing in Health programme, said: “According to a recent report by NESTA, investment activity in Europe and the UK has decreased by 40% since the start of the current economic crisis. Despite the challenging conditions for raising funds in the venture market, this source of financing still represents a significant means of supporting innovation.
“Our panel of investors advised that their strategy for evaluating opportunities centre upon identifying deals with a visible market, a strong management team and a clear exit route in the form of a licence deal or trade sale. It is crucial for those seeking investment to ensure they have a robust proposition and the right management team to lead the success.”
The research also showed that whilst the regional strengths were known to the panel of investors, deal opportunities were not considered to be particularly visible.
Lisa continued: “It may be easier for companies to access and develop relationships with local investors and business angels but in these challenging times they also need to be looking further afield for investment.
“Encouragingly, the investors we spoke to are all looking to make two or more new investments in the next few months. Companies in Yorkshire need to capitalise on these opportunities, not only for their own success but to help put Yorkshire firmly on the map as a leader in healthcare technologies.”
The Investing in Health programme forms part of Yorkshire Forward’s strategy to support the development of the healthcare technologies industry in the region. Led by a team of healthcare and finance experts at Grant Thornton, the programme helps healthcare companies improve their chances of investment. To find out more about the programme visit www.investinginhealth.co.uk
