By Yantoultra Ngui
SINGAPORE (Reuters) -CBC Group, Asia’s largest healthcare-focused asset manager, has raised $500 million for its second R-Bridge Healthcare Fund, making it the region’s biggest healthcare private credit fund, the company said on Wednesday.
The fundraising is occurring amid a global expansion of private credit providers, with the value of loans and related investments projected to reach $3 trillion by 2028, doubling from that in 2023, according to forecasts from Moody’s.
Healthcare has emerged as a key driver for the private credit sector, accounting for about 20% of direct lending deals in 2024, according to Prospect Capital, citing PitchBook data, as investors seek stable returns in non-cyclical sectors such as pharmaceuticals and medical technology.
Singapore-based CBC Group, which manages about $11 billion in assets, launched its private credit and drug royalty strategy in 2020. The new fund is 66.7% larger than its predecessor, which raised $300 million in 2020 as a single-investor strategy focused on China.
“This $500 million raise is significant because we went from one investor to a diversified group of investors across sovereign wealth funds, corporate pensions, financial institutions and family offices from the U.S., Europe, Asia and the Middle East,” Michael Keyoung, Senior Managing Director and Head of Private Credit and Royalty at CBC Group, told Reuters in an interview.
The fund will invest globally given CBC Group’s deep-rooted healthcare domain expertise, he added.
“Around half of the portfolio will focus on drugs that are already approved and medically necessary, with strong safety and efficacy profiles. The rest will go into approved medical devices and diagnostics,” Keyoung said.
He added that the strategy is positioned for long-term growth.
“This strategy is here to stay. It’s a multi-billion-dollar opportunity that will continue to grow. In the U.S. alone, this is a $20 billion per year market, and we see huge upside ahead,” he said.
CBC Group’s approach centres on non-dilutive financing, which lets companies raise funds without giving up ownership, and royalty-backed structures where investors are repaid from a share of future product revenues, according to Keyoung.
“Royalty-backed financing gives us downside protection and immediate cash flow. Unlike venture bets, our investors start receiving capital back every quarter from day one,” he said.
(Reporting by Yantoultra Ngui; Editing by Christian Schmollinger)
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