Q&A with MedTech investor Valiance: "Many of the changes will be permanent"
Jan Pensaert (pictured) is the founder and managing partner of Valiance, a global life sciences investor focused on addressing the unmet needs of a growing and ageing population. Valiance makes an impact through investments in medtech, with an additional focus on digital and nutritional health.
How have your firm’s operations changed since the start of the pandemic?
The biggest challenge in the beginning of Covid was not knowing enough about the impact the virus would have on the individual but also about whether the healthcare system could cope. This has now been more clearly assessed and even as we see some significant flare-ups happening in different geographies, I do not believe we will see a global lockdown to the same extent as we have witnessed before. Business travel has now been reduced to almost zero, and it will be interesting to see how much of a permanent impact that will have.
Transitioning to working from home has been surprisingly effective for us. In the first week or two we had to learn to work more independently rather than relying on in person team meetings. Then we also figured out that online meetings could be much more focused than initially anticipated, but non-stop live screen time was also very tiring. The challenge was about balancing out the need for a new working method, while maintaining quality of life and mental health for all team members.
Looking back over these past few months, the majority of the people in our investment industry came to realise that much of the travelling before Covid was more of a habit and may not really be needed going forward. The challenge towards a successful transformation post Covid is about how you build relationships, not only within your current portfolio companies, but also with the companies in your pipeline. When you invest in portfolio companies, you want to do very thorough due diligence, and I am thrilled to see that our industry post Covid is now successfully performing full due diligence processes leading to investments without any in person contact. Once you invest you want to apply the best governance practices and coach the management teams, but that doesn’t necessarily have to mean travelling four to six times a year to attend in person board meetings. Having a face to face meeting is more qualitative, but from a technical perspective, everything can still be done online.
Which ones of these changes will last, do you think?
The shift to digital that already started, say, a decade ago, has very much accelerated. Travel will be impacted for at least a year, a year and a half. Board meetings will continue to be held more in a digital format, as well as investor conferences and even fundraising. The increase in digital will furthermore open up a new way for businesses to expand, without necessarily having to set up offices in different regions. Education, training and marketing will also see a shift toward digital. So, many of the changes will be permanent.
The challenge will be to maintain interpersonal interaction in a way that is not only about work and efficiency in meetings. You need to continue to maintain online what you would do in person. When it comes to having online quarterly review meetings with team members for example, or even online off-sites it’s important to make people feel the same openness and connectivity as they would in real life.
Is it possible to do everything digitally from now on?
One of the funds in our peer group has just made two very large investments completely digitally, so it’s possible. You can perform interviews, market studies and check references etc. We are still human though, we are social beings, so that interpersonal contact will need to remain and it will also differ between regions – Asia is very different from the US or Europe.
How would you define a responsible investor?
It starts with yourself. If you're not a responsible and mindful human being, you cannot pretend to be a responsible and mindful investor.
I used to have a problem with the term ‘impact investing’, as many opportunists jumped onto that terminology to project some form of impact without living it. And if you do not live it, it is much harder to generate that impact. You need to live it in front of your family, colleagues, and the broader community.
For example, for the last decade that has been a more formal requirement in many countries to have a minimum number of women on company boards. So it was interpreted as an obligation for quite a long time, while it should be just as much about empowering women in all aspects of society. It starts with an equal and balanced education, not only with regards to gender but also racial equality from the earliest days of schooling.
The current impetus to change is much broader now. Today there's a whole new generation of people who are much more aware of the environment, of gender equality, diversity etc and this crisis will be a unique opportunity for businesses to evolve. If they don’t, they risk disappearing.