Find more detailed analysis by Credit Suisse on the Silver economy and other investment opportunities in Supertrends 2021. Alternatively, contact your relationship manager.
The Silver economy comes of age
Investment opportunities in biopharma, care and consumer
The Silver economy is ripe for investment. Globally, the number of people aged 60-plus will more than double to at least 2 billion by 2050. Never before have seniors had such spending power.1 Investors looking at this demographic should focus on experienced providers, innovators and those leading on value and cost.
Fundamentals are strong for therapeutics and devices companies, healthcare and facilities, as well as pensions, health and life insurance. The opportunities for good returns are immediate as well as medium- and long-term. This is why we call the Silver economy a Supertrend.
Get the lowdown on investing in the Silver economy
We discuss the areas to look out for in medicine such as applying mRNA advances to oncology and even regenerative diseases and how while business travel is unlikely to rebound to previous levels travel for leisure is set to bounce back.
Watch full video here.
Focus on innovative therapies
Those working on antibody therapies – think mRNA vaccines during the Covid-19 pandemic – will continue to innovate rapidly, delivering breakthroughs for globally pervasive diseases such as Alzheimer’s and cancers.2
Similarly attractive are companies focusing on prevention and early diagnosis, as they will help keep a brake on otherwise rising treatment costs. Liquid biopsies and medical imaging are promising niches, the former estimated to be worth up to $75 billion in the U.S. alone.3
Fill the funding gap in care
Dedicated healthcare and equipment providers are in prime position to meet the needs of the aging population. With demand rising, there’s already a provision gap. For accommodation, consider providers that operate across the care spectrum from independent living to the infirm. For telemedicine, set to be worth $460 million annually by 2030, proven operators and those offering services that help plan for multiple chronic conditions are well placed to offer good returns.4 Also, seek out companies extending services into new areas set to benefit from seniors’ greater wealth. These include dermatology, behavioral health and second opinions.5 It’s also worth noting the potential of telehealth diagnostics – forecast at $71.4 billion by 2027.6
Review opportunities in private pensions, healthcare and insurance
The trend is toward greater private-sector pensions as state provision comes under pressure from strained public finances. There is also scope for growth in insurance.7 We concur with Swiss Re’s view that demand will grow with the general increase in health risk awareness following the pandemic.8 Insurers with online distribution in under-penetrated markets such as China offer great potential, but there are also opportunities for established providers.
Spot shifting consumer trends
Demand has been suppressed by the pandemic and is likely to take time to recover. But travel and tourism for the Silver economy are worth watching as investment opportunities. Some evidence suggests there is a shift under way from global to local brands.9
Opportunities to explore:
- Consider innovative biopharma, medical tech and life sciences companies focusing on seniors
- Seek out companies within senior housing and managed care and those with competitive telemedicine services
- Review pension, health and insurance providers
- Watch travel and tourism and be alert to the growing power of local brands
All investments involve some level of risk. Simply defined, risk is the possibility that you will lose money or not make money. Before you invest, please make sure you understand the risks that apply to the products. As with any investment, you could lose money over any period of time.
To the extent that these materials contain statements about the future, such statements are forward looking and are subject to a number of risks and uncertainties and are not a guarantee of future results/performance.
Footnotes:
1 The silver economy is coming of age: A look at the growing spending power of seniors” (The Brookings Institution), January 2021
2 “8 key clinical trials to watch for the rest of 2021” (Biopharma Dive), June 2021
3 "Cancer Prevention and Early Detection Are One Step Closer as Universal DX Announces Breakthrough Study Results From Its Multi-Omics + Computational Biology + ML Blood Test” (PR Newswire), June 2021
4 "Projected global telemedicine market between 2019 and 2030" (Statista), December 2020
5 "Digital Health Primer: Healthcare Digital Transformation Is Here to Stay, Identifying LT Winners Is the Key" (Credit Suisse), June 2021
6 “Telehealth Market Worth $71.44 Billion, Globally, by 2027 at 16.4% CAGR: Verified Market Research” (PR Newswire), June 2020
7 “Public pension pressure” (Financier Worldwide Magazine), March 2015
8 “All change: how COVID-19 is transforming consumer behaviour” (Swiss Re), December 2020
9 “The real reason why Chinese consumers prefer local brands” (McKinsey & Company), December 2017
Source: Credit Suisse, unless otherwise noted.
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