Profile: Quadria Capital's Abrar Mir

Abrar Mir, managing partner and co-founder of healthcare-focused private equity firm Quadria Capital, never planned to focus the bulk of his career on the medical industry. But in life, as in investing, sometimes the most compelling opportunities emerge by accident rather than by design.

Mir jokes that he began his career on the “dark side,” working as a trainee solicitor in London after completing his education in international law at the University of Cambridge in 1993. His early work revolved around corporate M&A and cross-border transactions. This period included stints in the US, Russia and the Middle East, where he helped the likes of UK pharmaceutical giant GSK execute international growth plans.   

“Even though I enjoyed it intellectually, I just felt that lawyers tended to get involved after a deal was done or after an event had already taken place,” he says. “So after a few years, I decided I wanted to get closer to where the action was and where the commercial decisions were actually being made.”

This transition started at the UK offices of Salomon Brothers, the Wall Street investment bank that went on to become Citigroup, and a chance role in the firm’s healthcare division. Mir admits to having little working knowledge of the sector when he took the job.

However, Mir was immediately attracted to the scientific depth of the sector and the scope of effort required to achieve even the most modest of laboratory successes. Confident that he was now deal making in the world’s most complex and ambitious enterprise, he sharpened his professional focus, taking charge of Citigroup’s European and emerging markets healthcare investment banking division by the early 2000s.

“You had to operate at a very high level to succeed in that industry because it was so competitive – it was really an environment where you had to swim very well or you would sink very quickly,” Mir says. “That was a discipline that worked very well for me, and it’s allowed me to bring some more intellectual rigor to thinking about strategically repositioning businesses.”

This experience quickly precipitated similar work at Bank of America Merrill Lynch and a deeper appreciation for difficult realities that are often poorly understood outside of doctoral circles. Perhaps most importantly, this includes appreciating that the immensity of the scientific challenge which impressed Mir also had direct impacts on both the cost of care at the human level and the viability of potential business investments.

“Investment banking gave me an opportunity at a very young age to be exposed to some of the leaders in the healthcare industry in the US and Europe – and to understand from them, first hand, what the key factors are recognizing a good pharmaceutical company or a good hospital business,” he says. “It’s very hard at the early stages of a career to get access to those types of personalities.”

A new partnership

By late 2006, Mir had moved to Singapore to join Religare Capital Markets, a pan-Asian division of Indian financial services group Religare, as global head of healthcare investment banking. This work introduced him to Amit Varma, a critical care physician helping the firm build up its healthcare portfolio. 

Mir and Varma established Quadria in 2008. Although early investments focused on India, Singapore was chosen as the project’s base due to a favorable regulatory regime, a strong local talent pool in both healthcare and financial services, and more immediate access to a wider swath of Asia’s high-growth regions. 

“I was very fortunate not only to learn what it takes to identify what makes companies successful, but also what it takes to build great companies and help them grow,” Mir says. “I wanted to combine that knowledge with Amit’s operating knowledge and bring it to Asia to help create the next generation of healthcare leaders.”

Quadria closed its first vehicle, known as India Build-out Fund, in 2008 at $100 million. The fund brought together Religare and Indian GP Milestone Capital Advisors as investors with a mandate that included education and media services in addition to healthcare. After recording indicative annual returns of 1.7x and an IRR of more than 30%, the platform returned with a second fund that closed at $700 million in 2010. This was a proprietary investment book backed by only two institutional investors, including Religare, and focused predominantly on Southeast Asia.

Following the sudden death of Ved Prakash Arya, the founder of Milestone, in 2011, Mir and Varma decided to buy out the Milestone-Religare franchise and formally rebrand. As such, their third fund was the first to be raised independently, with LP support from Overseas Private Investment Corp, the International Finance Corporation and a host of European and US financial institutions.

Fund III closed at $304 million in 2015 but has deployed some $450 million to date thanks to additional participation from various backers. Last year, a venture fund called HealthQuad reached a first close of around $10 million. Quadria now claims some $1.5 billion of assets under management, reflecting a rapid growth trajectory Mir ties to a coinciding migration of global healthcare dollars from West to East. 

“For me, the lightbulb moment happened when I noticed Western pharmaceutical companies were no longer investing in Asia just to lower their costs, but starting to notice that Asia was where most of their revenue growth was coming from,” he says. “That fundamental shift happened extremely quickly, maybe over a five-year period, and it was really part of the reason I wanted to move to Asia. I thought that if multinationals could take advantage of this space, there must be an opportunity for the local players as well.”

The healthcare sector is said to be growing at 15% per annum in Asia and is expected to be worth $4.3 trillion by 2030, outstripping the current scope of the combined US and European market. Further, it is estimated that 65% of all prescriptions written by physicians in Europe are for Asian companies, and that Asia is now home to more US Food & Drug Administration-approved drug manufacturing facilities than the US itself.

Looking for cures

Mir sees the region’s biggest differentiator as a healthcare market, however, in statistics that indicate it is overwhelmingly sicker than the rest of the world. For example, Asia is home to around 35% of the world’s population but has about 45% of the disease burden. Aggravated by longstanding economic issues, this offset has created a legacy of stretched hospital services and a lack of specialized doctors. Anecdotes of two patients to a bed and deadly-long waiting lists have become standard.

Meanwhile, the observation that 95% of Asians pay for healthcare out of pocket has amplified the urgency around establishing more accessible service provision models. This scenario marries well with private equity’s consolidation and value-add strengths since the establishment of larger, more professionalized healthcare businesses is seen as a ticket to economies of scale.  

“Creating business models that have universal applications to fill a gap across many geographies is a mission that a lot people are pursuing in a number of ways,” Mir says. “What we want to do is develop businesses models that cannot be replicated from Europe or the US, but instead must be built around the circumstances of the human experience in Asia. And in that way, we hope to ultimately create an opportunity to bring about a huge social change.”

Private equity has been critical to healthcare progress in Asia so far, with Mir noting that about seven out of 10 beds in the region’s clinics were built by the private sector. But achieving scale has been a key theme not only because private M&A and buy-and-build strategies improve accessibility for patients – they also improve economic resilience.

Although a lack of government wherewithal in Asia creates opportunities for investors such as Quadria to build up the region’s infrastructure and future leaders, Mir sees the healthcare funding challenge as too universal to be considered exclusively along private-private lines. In this view, the heart of the healthcare issue in Asia is the fact that, unlike Europe and the US, it is not a matter of political debate.

Instead, the development of healthcare in the region is, perhaps more logically, a matter of life and death. In many areas, the shortcomings are so dire, the only social question on the table is how the most effective business models can be implemented to service the people most in need.  

“Our aim is to democratize healthcare in a different way than it has been in the past by building scalable businesses that are accessible to people at the bottom of the economic pyramid,” he says. “That’s why the human element is the most important part of what we do. Creating healthcare solutions where there were none before not only touches lives and improves lives – it saves lives.” 

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• Topics
• Southeast Asia
• Healthcare
• GPs
• Singapore
• Quadria Capital