The unprecedented aging of the global population will drive
increased opportunities in senior housing, multifamily condos,
biotech, and the emerging silvertech industry.
NEWARK, N.J.–(BUSINESS WIRE)–Aging populations worldwide will create investment opportunities across
real estate, healthcare, and technology, according to research released
today by PGIM, the $963 billion global investment management businesses
of Prudential Financial, Inc. (NYSE:PRU).
Silver Lining: The Investment Implications of an Aging World urges
institutional investors to consider how a graying world could impact
their portfolios. The focus on the longevity megatrend follows PGIM’s
recent examination of the urbanization megatrend in The
Wealth of Cities.
“As chief investment officers take a long-term strategic view across
their portfolios, it will be increasingly important to evaluate how to
capture the benefits of secular trends such as aging and urbanization,”
said David Hunt, PGIM’s president and CEO. “We gathered over 30 PGIM and
Prudential experts to debate the most attractive investment themes
arising from the longevity megatrend and to identify the likely winners
and losers across different sectors in the economy.”
Global aging will reshape consumer spending for decades to come,
according to the report. These changes will not only impact developed
markets but also have a far-reaching effect on emerging markets, home to
two-thirds of the world’s elderly. In particular, the report calls
attention to evolving opportunities set within real estate and new
opportunities within healthcare and technology, as follows:
Real Estate represents more than 40 percent of the gross assets
of 65+ households in major developed markets like the U.S. and the
U.K., and aging populations will reshape demand in the sector, along
three key investment themes:
From homes to condos: In the U.S., as an
example, Baby Boomers are discovering the appeal of active urban
lifestyles and creating demand for centrally located condos in
cities like Raleigh, N.C.; Nashville, Tenn.; Austin, Texas; and
Senior housing: Demand for senior housing in the
U.S. alone will surge by 850,000 new units by 2030, a 75 percent
increase from 2010, according to Senior Housing Analytics.
Other nations, like the U.K., Japan, and China, are also straining
to meet demand.
Eds and Meds: A silver tsunami brings with it a host
of age-related diseases—and a growing industry to treat and cure
them. Opportunities exist to invest in the real estate required by
biotech start-ups, established medical companies, and research
centers that typically cluster around universities.
- From homes to condos: In the U.S., as an
Healthcare and Technology will grow substantially, driven by
people over 85 who spend four times as much on healthcare as those
aged 45 to 64, leading to two key investment themes:
Pharmaceutical and biotech firms: Investors can find
focused opportunities among venture capital firms whose operating
companies target diseases such as dementia, stroke, cancer,
Alzheimer’s, and Parkinson’s. Mid- and late-stage pharma-focused
private equity also plays a role.
Silvertech: A new wave of businesses are emerging
that create, distribute, and use technology-enabled medical
services and devices to help seniors live more independently,
including providing solutions for chronic care, enhancing
mobility, and improving delivery of medical care.
- Pharmaceutical and biotech firms: Investors can find
Taimur Hyat, PGIM’s chief strategy officer, said, “For the first time in
recorded history, the old will outnumber the young. Our report
demonstrates the profound impact global aging will have on individuals,
businesses, governments, and investors around the world. Long-term
institutional investors should holistically evaluate the longevity
megatrend and consider capitalizing on the opportunities it will bring.”
For more details and to download a copy of the paper, please visit www.PGIM.com/silverlining.
PGIM’s businesses offer a range of investment solutions for retail and
institutional investors around the world across a broad range of asset
classes, including fundamental equity, quantitative equity, public fixed
income, private fixed income, real estate and commercial mortgages. Its
businesses have offices in 16 countries across five continents and had
$963 billion in assets under management as of December 31, 2015. For
more information, please visit www.pgim.com.
About Prudential Financial
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with
more than $1 trillion of assets under management as of December 31,
2015, has operations in the United States, Asia, Europe, and Latin
America. Prudential’s diverse and talented employees are committed to
helping individual and institutional customers grow and protect their
wealth through a variety of products and services, including life
insurance, annuities, retirement-related services, mutual funds and
investment management. In the U.S., Prudential’s iconic Rock symbol has
stood for strength, stability, expertise and innovation for more than a
century. For more information, please visit www.news.prudential.com.