Category Investments

Sygnia Enters the Global Health Innovation Race

05 August 2020 Sygnia
David Hufton, CEO at Sygnia

David Hufton, CEO at Sygnia

Fintech disruptor Sygnia is launching a Global Health Innovation Fund, giving South African investors an opportunity to invest directly in the world’s new “space race” and a chance to contribute to real socioeconomic change.

With the World Bank forecasting global GDP to contract by 5.2% in 2020 due to the Covid-19 pandemic, and the economic impact of this global health crisis hitting home for South Africans daily, the direct link between robust and affordable healthcare provision and economics has never been as devastatingly in the spotlight as it is now.

When looking beyond the destruction to reconstruction, Sygnia believes the world has been presented with an opportunity to reinvent healthcare provision, from preventative care ad delivery of basic health services through to diagnostics and treatments. Creative, novel solutions can radically improve the quality of life for people in both developed and emerging markets while boosting global growth and creating job opportunities.

Within this critical context, Sygnia is launching its Sygnia Health Innovation Global Equity Fund (SHIGEF) on 5 August 2020, giving South Africans the opportunity to invest in innovative global health solutions that are certain to have a measurable impact on the world’s socioeconomic prosperity going forward.

The fund invests primarily in listed global companies in the healthcare sector, but with a mandate to expand its investments to ground-breaking research and developments in life sciences involving biotechnology, nanotechnology, information technology, genetic engineering, robotics and 3D-printing technologies. Geographically, it has a 66% exposure to the US, followed by a 9% exposure to Switzerland. Sygnia has incorporated an ESG screen into its investment process to ensure that not only is the fund exposed to the fastest-growing investment sector, but to the companies that put the “care” into “healthcare”.

The overall objective of the SHIGEF is to outperform the returns of the MSCI World Health Care Net Total Return Index, which sets the benchmark for global healthcare investment across 23 developed markets and has delivered an 18% gross return in rands since 1995.

“From vaccines to antibiotics and from sanitation to nutrition, history has shown us that healthcare innovation thrives during periods of great instability and seemingly insurmountable challenges,” notes Sygnia CEO David Hufton. “With the race on to develop a vaccine for Covid-19 in record time, the imperative to invest in the future of healthcare is as important – if not more – in 2020 as it was during the Spanish Flu, the Great Plague, the HIV crisis and other history-changing global health crises.”

Good Health Makes Good Economic Sense

While true ill-health costs to society are immeasurable, the quantifiable economic costs are already terrifying. Global business consulting firm McKinsey released A Prescription for Prosperity in July this year, a report that analysed 200 countries over a 20-year period and estimates that the cost of ill-health was more than US$12 trillion in 2017, about 15% of global real GDP. And that’s three years before the Covid-19 pandemic wreaked economic and societal havoc across the globe.

“Increased investments in innovative solutions to solve the most pressing health needs of our times – an ageing population, chronic diseases, mental health and, of course, viruses with the potential to create globally devastating pandemics – makes not only good economic sense, but good social sense, too,” stresses Sygnia analyst Monique Davidson, one of the fund’s architects.

Investing in Health Beyond Covid-19

As countries around the globe start to plan beyond the immediate crisis caused by Covid-19, Sygnia’s hope is that governments will examine the weaknesses and inequalities that the pandemic has exposed in healthcare provision, weigh up the economic and social impacts of good healthcare and work with civil society, the private sector, investors and innovators to effect health reform and to invest wisely in the world’s future health initiatives.

“Launching our Health Innovation Fund is Sygnia’s way of using the hard-learned lessons of this global pandemic as a catalyst for change and, hopefully, of creating a more robust market for innovative solutions to improve physical, mental and societal health for everyone on this planet,” says Hufton.

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