In a recent fireside chat, Jeffrey Li, the Founding Partner and CEO of GL Capital Group, shared his extensive insights into the private equity landscape, with a particular focus on the healthcare sector in China. Here are the key topics discussed:

Jeffrey Li’s Background and GL Capital’s Journey: Jeffrey Li began his investment career with the Pritzker family in 1993 and later served as the country president of Novartis before founding GL Capital in 2010. He emphasized his passion for investment and the valuable experience gained in the healthcare industry during his tenure at Novartis.

GL Capital’s Investment Philosophy: GL Capital is a leading healthcare private equity firm in China, known for its deep industry knowledge and successful buyout deals. Li highlighted the firm’s focus on investing in leading healthcare companies and its pioneering role in the China healthcare buyout landscape.

Cycles in Private Equity and Government Influence: Li discussed the various cycles in China’s private equity market, largely influenced by policy changes. He noted the significant role of government support, which now accounts for approximately 80% of total funding in Chinese private equity. This support includes favorable tax policies and substantial financial backing.

Specialization in Private Equity: Li emphasized the global trend towards specialization in private equity, particularly in healthcare. He explained how GL Capital’s exclusive focus on China healthcare, supported by a dedicated team, provides a competitive edge in the industry.

Macro Trends and Healthcare Investment: The discussion covered how GL Capital triangulates macro trends in healthcare with specific Chinese trends to identify investment opportunities. Key drivers include an aging population, increasing income, and innovation, which contribute to the sector’s resilience and growth.

Regulatory Environment and Innovation: Li praised the Chinese FDA’s role in fostering innovation and expediting drug approvals, making China a conducive market for pharmaceutical development. He highlighted the significant increase in global clinical trials and licensing deals involving Chinese biotech companies.

Capital Market Dynamics: The conversation touched on the challenges and opportunities in China’s capital markets, particularly the impact of a depressed stock market on private equity exits. Li noted the growing importance of the buyout market as an alternative exit strategy.

Deal Origination and Value Creation: Li shared insights into GL Capital’s approach to deal origination, combining top-down research with bottom-up sourcing activities. He also discussed the firm’s value creation strategies, emphasizing the importance of operational expertise and a dedicated post-investment team.

Future Aspirations: Looking ahead, Li expressed GL Capital’s ambition to become a global leader in healthcare investment, leveraging its strong foundation in China to expand internationally.

Key timestamps:

00:09 Introduction to the Fireside Chat
01:40 Investment Philosophy of GL Capital
02:25 Cycles in Private Equity and Policy Impact
04:10 Government Support in Private Equity
08:19 Triangulating Macro Trends in Healthcare
10:34 Regulatory Environment for Drug Approval
13:29 R&D Expenditure Trends in China
15:13 Current State of the Capital Market in Healthcare
17:11 Deal Origination Strategies
20:50 Alignment Between Investment and Value Creation Teams
23:05 Promising Sub-sectors in Healthcare
23:53 Key Investment Themes in Health Care
25:19 Aspirations for Global Leadership in Health Care Investment