Healthcare Sector

Healthcare has several features that make it an attractive area for investing.

First, healthcare is a large and growing sector. Per OECD data (2011), healthcare spending consumed 9% of worldwide GDP and 17.9% of GDP in the US. Moreover, demographic trends support the sustained need for healthcare services. Aging populations and unmet medical needs will continue to drive the demand for technological innovation and service providers.

As it pertains to investing, there are more than 2,500 public healthcare companies around the world. The universe of the healthcare trade is broad and heterogeneous. Our investments include pharmaceutical companies, medical devices makers, generic drugs companies, managed care and insurance companies, drug stores, capital equipment manufacturers, hospitals, service providers, business-to-business companies, healthcare IT, distributors and more. This breadth allows Sio to build a portfolio of diversified, uncorrelated investments.

Healthcare is highly specialized and esoteric. There are unique scientific issues, regulatory considerations, intellectual property concerns, economic factors, and legislative elements. As a result, healthcare stocks are occasionally mispriced. This creates opportunities to invest, both long and short.

Our expertise and focus give us a distinct advantage in understanding the complexities and idiosyncrasies that are inherent within healthcare. We spend all of our time assessing the issues that impact this sector and its related companies. We have developed a thorough understanding of the complex regulatory, clinical, and legal issues that govern this sector. This gives us a competitive edge to take advantage of investment opportunities and invest prudently.