In an effort to expand its investment portfolio, Alkhair Capital, an asset management and investment banking firm, has introduced a $100M fund dedicated to investing in healthcare technology ventures.
This Sharia-compliant investment fund, domiciled in the Dubai International Financial Centre, will focus on businesses that leverage advanced artificial intelligence to enhance healthcare providers.
The fund, according to The National News, aims to offer liquidity to its target companies to support their growth and has a structure as an open-ended vehicle.
“The healthcare sector is experiencing remarkable growth, propelled by the region’s expanding senior citizen population, rising life expectancy and a surge in lifestyle diseases,” Naveed Aurakzai, chief executive of Alkhair Capital Dubai, said.
“This surge has led to significant challenges, including insufficient infrastructure, higher medical claim settlements and liquidity constraints due to extended working capital cycles.”
The new investment vehicle will play “a pivotal role in addressing liquidity challenges that are “hampering the profitability and expansion of medical facilities”, he added.
According to Mr. Aurakzai, referencing Alkair’s internal data, the healthcare sector in the UAE is grappling with a staggering $1.2B in medical claims stuck in processing.
On average, healthcare facilities experience a delay of 112 days before receiving 90 percent of their payments from insurance companies.
“We launched this investment fund with the primary aim of addressing one of the most formidable challenges within the sector, estimated to encompass $100B in spending within the GCC,” Mr Aurakzai said.
Healthcare Transformation in GCC and MENA
The healthcare industry across the GCC and the broader MENA region has undergone substantial expansion and transformation in recent years.
The impact of the COVID-19 pandemic and the subsequent influx of investments from various stakeholders has catalyzed this transformation.
Key governmental reforms, particularly within the GCC’s six-member economic bloc, including the introduction of mandatory health insurance, have played a pivotal role in driving this sector’s growth.
A report from Dubai-based Alpen earlier this year stated that the projected healthcare expenditure in the GCC will reach $135.5 billion by 2027, with an annual growth rate of 5.4 percent from 2022.
Additionally, the report anticipates that healthcare expenditure as a percentage of gross domestic product (GDP) in the region will increase from 5 percent in 2022 to 5.8 percent in 2027.
In 2021, health tech companies received a total of $29.1B in global funding through 729 agreements, with an average deal size of $39.9M, as reported by Deloitte consultancy.
It is anticipated that the market will continue to expand in the coming years, with research and development attracting investments, followed by on-demand healthcare and disease treatment.
Alkhair Capital’s Partnership with Klaim Technologies
As part of its proactive investment management strategy to align with the goals of the new fund, Alkhair Capital has partnered with Klaim Technologies, a FinTech company that provides AI-powered solutions for evaluating insurance claims.
Alkhair plans to allocate its investments across short to medium-term durations, striving to achieve a balance between meeting liquidity needs and attaining favourable returns.
“Our partnership with Alkhair … marks a significant step towards resolving the pressing liquidity challenges in the healthcare sector,” Karim Dakki, chief executive of Klaim, said.
“Leveraging our AI-driven insurance claims assessment technology, we aim to optimize and accelerate the claims process, facilitating prompt payments to medical facilities.”
Alkhair, a firm offering asset management and investment banking services, encompassing activities such as debt and equity capital market transactions and advisory for mergers and acquisitions, commenced its operations in Saudi Arabia in 2009.
In 2014, the company established its DIFC office and additionally provides custody services to its clients for stock markets in Saudi Arabia and the UAE, as indicated on its website.
Among the funds under its management are the Alkhair Capital Sukuk Plus Fund, Alkhair Murabaha Fund, Saudi Equity Fund, and Alkhair Capital IPOs Fund.
