September 5, 2017 / 11:20 AM / 2 years ago

Fidelity's venture arm launches China-dedicated healthcare fund

SHANGHAI (Reuters) - Eight Roads Ventures, the proprietary investment arm of Fidelity International Ltd, launched its first dedicated China healthcare fund on Tuesday, doubling down bets on the country’s rapidly growing medical sector.

The firm, which said it also plans to launch a China-dedicated technology fund, said the $250 million China healthcare fund will allocate 40 percent of the capital in therapeutics, betting on a boom in innovative drugs in China.

“We’re about to witness an explosion of innovative drugs in China,” said Liu Weimin, partner at Eight Roads, which has invested in over 150 Chinese companies including Alibaba Group, WuXi AppTec and Innovent Biologics.

He cited supportive government policies, less cumbersome drug approval procedures, and an influx of capital into the healthcare sector.

Beijing has initiated ambitious policy reforms to invigorate healthcare, part of efforts to meet rising demand for quality medical services.

China has forecast total healthcare spending will surge to 8 trillion yuan ($1.2 trillion) by 2020, as the country tries to cope with a boom in its aging population.

That has created investment opportunities. Shuang Rongqing, a veteran private equity investor, last month launched a $150 million cross-border medical device fund aimed at tapping into China’s huge demand for overseas high-tech medical equipments.

Daniel Auerbach, head of Asia at Eight Roads, said the launch of specialized funds “reflects our confidence in the evolution of the China market and forms part of a strategy to more precisely target our healthcare and technology expertise.”

Reporting by Samuel Shen and John Ruwitch; Editing by Susan Fenton

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