CONTRIBUTORS
Steven Kornfeld, CFA
Partner, Private Investing
Ryan Biggs, CFA
Co-Head, Private Investing
James Cross, CFA
Co-Head of Private Investing
Robert Stevenson, CFA
Co-Head of Private Investing
Emily McCarthy
Research Associate
Executive Summary
- The combination of massive demand, persistent inefficiencies and accelerating innovation is creating a compelling opportunity for health care technology investors.
- Artificial intelligence (AI) is transforming health care by improving productivity, enabling continuous and personalized care, and supporting business models that align incentives around better outcomes.
- We believe the greatest investment opportunities will emerge from companies that can break the traditional trade-off between cost, access and quality.
- Franklin Venture Partners focuses on late-stage companies where proven execution translates innovative technologies into scalable business models and durable competitive advantages.
Understanding the Health Care Technology Opportunity
Health care has traditionally been viewed as a defensive sector, supported by resilient demand across economic cycles. Today, a convergence of structural and technological forces is expanding the investment narrative. Demographic trends are driving massive demand for care, while longstanding inefficiencies are creating significant opportunities for innovation. Advances in AI are enabling new business models with the potential to improve outcomes, expand access and reduce costs. Collectively, these dynamics are transforming health care from a defensive category into a structural growth market and creating a compelling opportunity for health care technology investors.
Exhibit 1: Health Care Is Moving from a Defensive Category into a Growth Market
Structural Changes in the Health care Industry
Source: Franklin Venture Partners. Views subject to change.
The convergence of structural demand, persistent inefficiencies and advances in technology is creating new opportunities to transform the US health care system. We believe the greatest opportunities will emerge from companies that break the industry’s traditional trade-offs by improving outcomes, expanding access and lowering costs while demonstrating the evidence, adoption and scalability needed to become enduring businesses. By focusing on these characteristics, Franklin Venture Partners seeks to identify and support the technology leaders shaping the future of health care.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal.
Equity securities are subject to price fluctuation and possible loss of principal.
Investment strategies which incorporate the identification of thematic investment opportunities, and their performance, may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. Focusing investments in the health care, information technology (IT) and/or technology-related industries carries much greater risks of adverse developments and price movements in such industries than a strategy that invests in a wider variety of industries.
Investment strategies involving Private Markets (such as Private Credit, Private Equity and Real Estate) are complex and speculative, entail significant risk and should not be considered a complete investment program. Such investments should be viewed as illiquid and may require a long-term commitment with no certainty of return. Depending on the product invested in, such investments and strategies may provide for only limited liquidity and are suitable only for persons who can afford to lose the entire amount of their investment. Private investments present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price.
WF: 12048660