Allan Gray doubles down on Ramsay despite private health crisis
Despite half of Australia’s private hospitals running at a loss, the contrarian investor is backing Ramsay Health Care, betting on a turnaround in the troubled sector.
The “unsustainable” economics of private healthcare have plunged Healthscope into receivership — but South African investment giant Allan Gray believes there’s still money to be made in the loss-making sector.
Chief investment officer Simon Mawhinney has revealed he’s betting big on Ramsay Health Care, adding the hospital operator to a number of his funds, even as he acknowledges the significant challenges currently facing the industry.
“I can't tell the future. I just know that if it carries on like this, private hospitals will go bankrupt,” he told Capital Brief.
Long-term structural headwinds have hit hard, with rising costs — including inflated wage bills — eroding profit margins. As Healthscope negotiates with creditors, including David Di Pilla’s HMC Capital, some observers have argued that its private equity owner, Brookfield, has made matters worse. But the crisis is sector-wide.
