Investing in healthcare is about more than chasing returns—it's about addressing global challenges and driving meaningful change. We spoke with Kieger to dive into how they balance sustainability, innovation, and impact in their investment strategy. From leveraging AI and early disease detection to tackling rising healthcare costs and improving access, they shared how they identify opportunities that not only perform but also transform the industry for the better.
How do you balance returns and sustainability in healthcare amid rapid tech advances?
At Kieger, we firmly believe that financial returns and sustainability are not mutually exclusive, but rather complementary goals. It is now well understood that ESG risks can be a significant threat to performance, particularly in the healthcare sector and especially when it comes to product quality issues. Further, our internal sustainability analysis also helps us to better understand a company's prospects and future cash flow resilience. We prioritize investments in companies whose products or services address current and future industry issues, such as making treatments more affordable, building resilient healthcare infrastructure or delivering better clinical outcomes. These companies are better positioned to thrive in a rapidly evolving industry, and hence will show a better stock performance. In essence, sustainability is not a constraint on financial returns, but a lens through which we identify the most promising and impactful opportunities in healthcare.
How do Kieger's origins shape its healthcare investment philosophy?
Kieger's origins in working closely with a select group of clients for over two decades shaped our investment philosophy by fostering a deep commitment to a long-term approach. While we are not a family office, our experience has led to focus on wealth preservation for future generations and aligning investments with client needs.
This long-term perspective is particularly suited to healthcare investments due to the features of the industry, such as high regulatory density and the need for significant upfront R&D investment, require patience and vision. It also drives us to invest in areas that create positive societal impact by addressing critical global healthcare challenges, such as rising healthcare costs, increasing disease burden for society and growing pressure on healthcare systems
What are the key risks and opportunities in healthcare, and how do you address them with a focus on sustainability and impact?
The healthcare sector has huge structural tailwinds, but also risks, especially when viewed through a sustainability and impact lens. On the opportunity side, the sector benefits from unique drivers such as an ageing population, changing lifestyles leading to rising rates of chronic disease, the growing middle class in emerging markets and rapid innovation. These drivers create room for long-term sector growth. However, with these opportunities come significant challenges. Rising healthcare costs are an issue, societies in general suffer from an increasing disease burden, and healthcare systems around the world are under enormous pressure.
To address these challenges, we are focusing on areas that offer both impact and financial potential. Examples are investments in indications such as pain management and mental health, leveraging technologies such as AI and digitalization in drug development, and supporting preventative measures such as early disease detection.
How does the Article 9 classification shape Kieger’s approach to integrating innovative healthcare solutions, balancing higher risks with potential for positive impact?
Our Sustainable and Impact funds are both classified as Article 9 under SFDR. Importantly, this classification has not changed our investment processes. Our commitment to sustainability and impact is the foundation of our approach, regardless of regulatory labels.
The Impact Fund focuses on companies whose products or services directly contribute to the United Nations’ Sustainable Development Goal 3 (Good Health and Well-Being), ensuring that each investment drives meaningful positive change. The Sustainable Fund, meanwhile, takes a broader approach, targeting companies that address critical healthcare challenges such as rising healthcare costs, increasing disease burden for society and growing pressure on healthcare systems.
What trends and innovations will shape sustainable healthcare investing in the next decade, and how will impact investing define success in this space?
The next decade in sustainable healthcare will show advancements in the convergence of data, AI, and biological science. This convergence is already improving our understanding of biological processes - such as genomics, proteomics and metabolomics - leading to new drug targets. It is also enabling earlier disease detection, prevention and better treatments, which can reduce hospital stays and healthcare costs. There is still immense potential to address unmet medical needs, for example by developing effective and safe treatments for conditions such as chronic pain and mental health disorders. At the same time, the success of impact investing will depend on ensuring that these innovations are both cost-effective and accessible. This means addressing the affordability of treatments, ensuring that clinical trials reflect diverse patient populations, and extending geographic reach to underserved regions.
Learn more about Kieger's values and services : https://kieger.com/