Octopus keen to extend its reach in Ireland through MedicX fund

Octopus, the fast-growing UK-based funds management group that manages more than £7 billion (€7.92 billion )in assets, is interested in further extending its reach in Ireland.

The group, which has backed more than 500 companies in Britain in recent years, is already active in the Irish market through its listed healthcare fund MedicX.

The MedicX fund has 166 primary healthcare properties in total, including five centres locally that are either open or under construction. Its Irish portfolio is currently valued at more than €60 million.

Opportunities

Speaking to The Irish Times, Octopus co-founder Chris Hulatt, who set up the business along with Simon Rogerson and Guy Myles in 2000 when he was just 23-years-old, said the group saw lots of growth opportunities in Ireland.

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“From a healthcare property standpoint, the reimbursement structure for GPS, while slightly different from that which operates in the UK, is very attractive,” said Mr Hulatt.

“Over time and given we find the right partners there are opportunities to grow in Ireland,” he added.

MedicX has four primary care schemes currently up and running in Ireland with a fifth one in Rialto, Dublin 8 due to be completed in early 2019.

The company is funding its expansion locally through a revolving credit facility provided by Bank of Ireland. Mr Hulatt said Irish lenders had expressed an interest in partnering with MedicX in funding further opportunities.

Octopus has six divisions in total covering healthcare, investment management, venture capital, property lending, renewable energy generation, and fintech. The group’s strategy is to focus primarily on sectors in which it believes customers are ill-served.

The group has entered a number of new industries in recent years – most notably energy, where is it now the third largest owner of renewable assets in the UK, and in healthcare, where it is focused on building care homes, hospitals and retirement villages.

“We like to change sectors that are either broken or complacent. Healthcare properties is a good example of this as it is due to be fundamentally disrupted due to demographics with the number of new care home beds needed over the next 20 years set to rise dramatically,” said Mr Hulatt.

Mr Hulatt said the same sort of demographic drivers leading to change in the UK healthcare sector were also present in Ireland.

Turnover

Octopus, whose founders were recent finalists in the EY World Entrepreneur of the Year awards, is now looking to grow the business to the point where it has over $26 billion in funds under management by 2020, along with $1.4 billion in turnover and more than 1.2 million customers globally.

The group has about 280,000 customers currently and has seen revenues grow at a compound annual growth rate (CAGR) of 34 per cent in the ten years to the end of April 2017.

While the group has multiple interests, Mr Hulatt said Octopus wasn’t interested in having a presence in every sector.

“We don’t want to do twenty things and do most of them badly,” said Mr Hulatt. “We’d rather focus on assets with which our clients will stay with us for the long-term and there is the possibility of us being the leader,” he said.