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Aussie Pensions Buy New Zealand’s No. 2 Hospital System Evolution Healthcare

QIC Ltd. and Sunsuper Superannuation Fund, both Australian pension funds, have agreed to buy Evolution Healthcare, New Zealand’s second-largest hospital operator.

According to a source familiar with the matter, the two would pay over A$700 million ($500 million) for the business, which already had 300 surgeons perform over 57,000 elective operations in the last financial year. The retirement funds are merging their resources to address what they call a “mega-trend” in healthcare demand caused by the region’s aging population.

We’re very pleased to have been successful in securing Evolution Healthcare, a long-standing and dominant healthcare operator with strong incumbent positions in its key catchments, Ross Israel, QIC’s Head of Global Infrastructure was quoted as saying in an announcement from the funds. It is a platform with an experienced management team which has strong potential for future growth and expansion over time.

The Evolution business runs a network of ten comprehensive and day hospitals in New Zealand, as well as a portfolio of ancillary healthcare facilities and one private hospital in Australia, according to the retirement funds, both of which are based in Brisbane.

The investment will be made through QIC’s Global Infrastructure Fund, which manages the Queensland state government’s long-term investment responsibilities. The deal adds to a busy year for the fund, which spent almost A$4 billion on sustainable infrastructure in 2021 and just finished a A$1 billion raising round to accomplish even more. Through its investment in Nexus Hospitals in 2019, the money manager has some experience in the Australian healthcare sector.

According to Sunsuper’s Head of Private Markets, Michael Weaver, the deal is the firm’s first investment in the industry.

Evolution represents “a strong platform to leverage the sector thematics around aging demographics and technology and medical innovation,” he said.

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