Alkhair Capital, a prominent asset management and investment banking company, has unveiled a $100 million fund dedicated to investing in healthcare technology ventures. The Sharia-compliant investment vehicle, based in the Dubai International Financial Centre (DIFC), aims to support companies utilizing cutting-edge artificial intelligence to strengthen healthcare providers, as stated in a press release on Monday.
As an open-ended fund, the investment vehicle’s primary objective is to provide liquidity to the targeted companies, facilitating their growth and expansion. Naveed Aurakzai, Chief Executive of Alkhair Capital Dubai, highlighted the remarkable growth of the healthcare sector in the region, driven by factors such as an aging population, increased life expectancy, and lifestyle diseases. However, this growth has also presented challenges, including inadequate infrastructure, delayed medical claim settlements, and liquidity constraints due to extended working capital cycles.
The new investment fund aims to address these challenges and play a pivotal role in overcoming liquidity issues that hinder the profitability and expansion of medical facilities. Alkhair Capital’s internal data reveals that the UAE health sector currently has $1.2 billion in pending medical claims, with healthcare facilities experiencing an average delay of 112 days to receive 90% of their payments from insurance companies.
Mr. Aurakzai emphasized the fund’s significance in addressing a formidable challenge within the sector, estimated to encompass $100 billion in spending across the Gulf Cooperation Council (GCC). The healthcare sector in the GCC and the broader MENA region has witnessed substantial growth and transformation, fueled by the impact of the Covid-19 pandemic and increased investments in the industry.
Reforms implemented by regional governments, including mandatory health insurance, have played a vital role in driving the sector’s growth. According to a report by Dubai-based Alpen, healthcare expenditure in the GCC is projected to reach $135.5 billion by 2027, with an annual growth rate of 5.4% from 2022. Furthermore, healthcare expenditure as a proportion of GDP is expected to rise from 5% in 2022 to 5.8% in 2027.
The global health tech sector saw significant funding in 2021, with $29.1 billion invested across 729 deals, according to Deloitte. The market is expected to continue growing in the coming years, with investments primarily focused on research and development, followed by on-demand healthcare services and disease treatment.
In line with its proactive investment management approach, Alkhair Capital has partnered with Klaim Technologies, a FinTech company that provides AI-powered solutions for insurance claim assessment, to meet the objectives of the new fund. Alkhair Capital will allocate the underlying investments across short to medium-term durations, striking a balance between liquidity requirements and favorable returns.
Established in 2009, Alkhair Capital offers a range of asset management and investment banking services, including debt and equity capital market transactions, as well as mergers and acquisitions advisory. The company operates in Saudi Arabia and has been present in the DIFC since 2014, providing custody services for stock markets in Saudi Arabia and the UAE. Notable funds managed by Alkhair Capital include Alkhair Capital Sukuk Plus Fund, Alkhair Murabaha Fund, Saudi Equity Fund, and Alkhair Capital IPOs Fund.