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Thursday, August 14, 2014

Where to invest and make money out of "population ageing"

Firstly, thanks to Stephen Johnston, the guy behind aging2.com, for publishing such a useful news update about what is happening in the ageing world. If you haven't subscribed you should.

From his publication I found a couple of links to articles about "making money out of population ageing". Not surprisingly, this is becoming a popular subject and one I continually get asked about.

The first link is to Bloomberg and is about a fund that has been established in Japan to invest in established companies. This is the second round of funding that has raised about £30 million

The second item was about existing funds and shares - mainly in the health sector that are likely to benefit.

Now, the truth of the matter is that it is very difficult (and dangerous) to invest purely on the basis that a company has exposure to older people. You have to take into account all of the issues about the company or the fund. Look at what happened when Saga launched on the UK stock market. The shares are still trading below their offer price.

What I do know is that the latest news that a £1 million fund has been established to "stimulate creative and digital innovation in UK healthcare" is likely to be a total waste of money.

Why I am so pessimistic?

A large slug of the money will go on administering the fund
The size of each investment is around £50,000. That is just enough to develop a service but most importantly to get it into a place that it can be replicated or scaled.
The UK healthcare system (the NHS) makes it almost impossible for new ventures to work.

So what will happen?

A nice report will be written
It makes a good press release and proof that we "doing something"
There will probably be some work for consultants
There will probably be a conference to show the results- I might even be invited to speak
Within 36 months there will be no trace of where the money has been spent and certainly nothing to show for it.

Such is life. Dick Stroud

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