You can’t judge a book by its cover. Those are words to live by, especially in the financial industry. Some people might run a fine-toothed comb through Highland Capital’s creation of a South Korean healthcare fund for the following three reasons:
“1. New Market”
Highland Capital raised $147 million to create a healthcare fund for investing in North America and South Korea. Highland admitted that this was its first foray into healthcare. It would work with the local Korean private equity and venture capital firm Stonebridge Capital to co-manage the fund.
Of course, expanding into new markets can be quite beneficial. It is high-risk and high-reward. As Highland Capital Management managing director and co-head Matt Jameson explained, “[t]he demographic ‘graying’ of America and increased access to healthcare services in Asia are driving greater utilisation levels and more complex consumer and government demands on the sector.” Senior citizens need more health care services.
“2. ObamaCare Timing”
Mr. Jameson said, “[t]he healthcare industry in the U.S. faces a number of disruptive forces that acutely affect companies in the middle market.” This is a very interesting point because the fund is South Korean. Shouldn’t it focus on building up the South Korean healthcare system?
This fund was created in May 2017 and ObamaCare was struck down in May 2017 by President Trump. That cannot be a coincidence, can it? It seems that this funding is meant to replace the lost funding from the United States government. The South Korean pension fund is investing in American healthcare. This also occurs when there are issues with the City of Dallas pension fund.
“3. South Korean Pension v. Japan Pension”
Some Asians might say – “Been there, done that.” In fact, Japan has increased its own investment into the United States during its ZIRP financial strategy. Japan has not only purchased more US Treasuries, but it has also used its Japan pension fund to invest in America. In fact, Japan just raised its stake in America in February 2017. Therefore, Highland Capital’s fund might be part of the strategy for “Making America Great Again.”