APRIL 18 2024
Said Joel Davidkin, one of Nordic Capital Advisor’s new partners. 2023 was an eventful year for Nordic Capital, and as part of the firm’s growth and to represent the depth and breadth of the leadership team at Nordic Capital Advisors, four new partners were promoted to the partner group. We had the privilege of engaging in a brief conversation with one of them, Joel Davidkin, delving into healthcare trends and the PE market heading into 2024.
Q: Could you provide an overview of the current state of the private equity market?
A: 2023 was a somewhat slower year from a transactional point of view, however we anticipate an acceleration in 2024. This will be visible in the Healthcare market as well, which I am focused on.
Q: In the Healthcare sector, which specific sub-sectors is Nordic Capital targeting?
A: The Healthcare team focuses on four key sub-sectors: MedTech & Life Sciences, Pharmaceuticals, HealthTech and Provider Services. We pursue a deeply thematic approach in each sub-sector and foster a proactive pipeline aligned with the market themes we seek out opportunities behind. We strive to be patient and identify targets early – we recognise that it sometimes takes years for opportunities to mature. We also adhere to strict company-level criteria – this allows us to maintain priorities. Our approach involves deep and early engagement with our priority targets long before concrete investment opportunities arise.
Q: Which sub-sectors do you focus on, and what prevailing trends do you observe within those areas?
A: I focus on the MedTech & Life Sciences areas, both of which are exhibiting several exciting growth trends. We are witnessing the emergence and gradual maturing of new biological therapy modalities, significantly impacting the value chain. Specifically, advancements in cancer care and rare diseases are bringing new treatment alternatives to patients with impressive clinical results. The influx of fresh funding into Life Sciences around the COVID-19 pandemic further accelerated the development of many of these new technologies. This presents opportunities for Nordic Capital, whether through investments in companies supporting the pharmaceutical industry with drug discovery, development or manufacturing.
We are also witnessing several promising growth trends in the field of MedTech. Specifically, we are observing the continued evolution of minimally invasive technologies and clinical approaches, as well as the introduction of novel technologies enabling remote patient care outside of traditional care settings. For instance, there's a growing emphasis on monitoring patients in their own homes rather than in hospitals. The move towards remote care is set to open interesting opportunities for Nordic Capital.
Q: What key factors does the team consider when identifying promising target companies in its focus sub-sectors?
A: When evaluating new opportunities, our team places particular emphasis on two factors: sustainable double-digit growth and true differentiation. Firstly, we seek companies supported by robust, fundamental growth trends over time. Secondly, we prioritises companies that offer unique and sustainable value add to their customers, ensuring they stand out in their respective markets. We particularly value customers’ perspectives when assessing whether true differentiation exists. Finally, a crucial aspect of our evaluation process involves examining the management team – we believe strong leadership is at the core of every success story.
Q: Can you provide some details about recent healthcare investments made by Nordic Capital? Are there any notable similarities among these deals?
A: Nordic Capital has recently made several exciting investments in the healthcare sector. Earlier in 2024, Nordic Capital invested in IntegriChain, a leading platform specialising in pharmaceutical commercialisation and market access with unique expertise in helping pharma companies optimise commercial outcomes for their drugs. Additionally, I’d like to mention Corpuls, which offers innovative and industry-leading resuscitation technology for professional users especially in emergency situations. Corpuls' solutions enhance the efficiency of first responder teams and exhibit potential for expansion beyond Europe. Finally, I wanted to bring up Equashield, a global leader in closed system transfer devices designed to safeguard healthcare professionals from exposure to hazardous drugs. Equashield is also bringing to market an exciting line-up of robots automating compounding of hazardous drugs.
All recent healthcare investments made by Nordic Capital share common traits that we find appealing: robust organic growth supported by market fundamentals and clear differentiation from competition.
Q: How does Nordic Capital partner with management teams?
A: Establishing early alignment and mutual respect with the management teams at portfolio companies is at the core of Nordic Capital’s investment process. A policy of honesty and transparency is key in our view, where objectives, concerns, ambitions, challenges and value creation plans are openly discussed. This two-way transparency is crucial for us and typically leads to strong trust, deep collaboration and creative problem solving between the portfolio management and Nordic Capital teams. Additionally, we have access to extensive expertise for portfolio companies to leverage – from procurement to commercial optimization tools and enabling software solutions – all to support the portfolio companies in accelerating growth and improving performance.
Q: What role do you see AI and machine learning playing in the future of healthcare, and how is Nordic Capital positioned to leverage these technologies?
A: We are witnessing the integration of AI into the healthcare value chain across our sub-sectors – from medical device manufacturing efficiencies to the optimisation of drug development process and clinical data processing. While AI tools serve to improve the efficiency of many portfolio companies’ workflows, we are also seeing the emergence of new AI-based value-added offerings to customers. One example is Nordic Capital’s portfolio company Clario, a global leader in technology for capture of endpoint data in clinical trials. Clario has made remarkable strides in implementing AI-based models to optimise the quality of clinical trial data and has also succeeded in extracting new clinically relevant information from the evidence collected in clinical trials – including from tumor images taken as part of cancer trials. This is incredibly exciting for us.
