Singapore-based private equity firm Kendall Court has announced an investment of $55 million in Indonesian healthcare business Mandaya Medical International Pte Ltd (MMI), an arm of local conglomerate Selaras Group.
The investment has been done by way of preference shares in the Mandaya Medical Group that operates a 218-bed hospital in Karawang. The funds will be used to develop a 420-bed hospital in Jakarta which is expected to open at the end of 2019, Kendall Court said in an announcement on Friday.
The investment follows Indonesia’s decision to open up the general hospital sector to foreign investors to support its ambition to achieve universal health coverage in 2019. In 2017, foreigners were allowed to acquire a maximum stake of 67 per cent in general hospitals in Indonesia, and ASEAN investors, up to 70 per cent.
“As part of its expansion strategy, Mandaya plans to build two more hospitals in the next five years, bringing total investment in the new projects including Mandaya Royal Hospital Puri (the new Jakarta hospital), to about $150 million during that period. The two additional hospitals will be located in major cities in Indonesia and will capitalise on robust economic growth fundamentals to drive demand in the country’s underserved healthcare sector,” the announcement said.
The Selaras Group acquired its first hospital, Mandaya Hospital Karawang, located 50 km east of Jakarta, in mid-2015 and following a revamp, transformed it into a 218-bed hospital with heart and vascular, neuroscience, and trauma recovery centres. The 420-bed hospital Mandaya Royal Hospital Puri will be located in Metland Cyber City, Jakarta.
It will be a general hospital with a neuroscience spine centre, an advanced cancer centre and a cardio-vascular arrhythmia centre – as well as 10 other specialist centres including those for women’s health and fertility, dental and oral surgery, as well as medical fitness and rehabilitation.
Indonesia has one of the lowest bed-to-population ratios in the world and needs an additional 500,000 hospital beds in the medium term. With a burgeoning middle class and rising income levels, there are plenty of opportunities in Indonesia’s healthcare industry.
Kendall Court Managing Partner Chris Chia said, the firm has been investing in Indonesia for many years and continues “to remain bullish about its overall prospects. We continue to look out for attractive growth opportunities for our investors.”
The PE firm, which manages equity-linked and mezzanine investments across Southeast Asia and has deployed and managed over $600 million in the region, is backed by several institutional and high net worth investors and has invested into the natural resource, healthcare, consumer and telecom industries over the past decade.
DEALSTREETASIA caught up with Chia for an interaction on the investment space in the region and how Kendall Court has moved away from the fundraising model. Chia, who co-founded Kendall Court in 2004, was a former Vice President at Citigroup and also an investment banker at Goldman Sachs focusing on mergers and acquisitions.
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