Increasing fundamental clarity offering timely growth alternative
05 Jan 2026
James DouglasFund Manager Team
Gareth PowellHead of Healthcare Team
As the year progressed, 2025 reassured investors that the sector clouds gathering into the New Year were out of touch with fundamental realities. Historically attractive valuations also compelled acquirers to act in force, lending additional assurances and ultimately leading to a banner year for M&A. While the healthcare sector ends the year on a firmer footing, we would argue that until more recently the market’s attention has been elsewhere. As funding and the returns on technology-related capital investments are increasingly being called into question, healthcare would seem a natural home for growth investors looking to diversify.
Our investments will naturally follow wherever innovation abounds and the best and brightest companies are enabled to lead. Although sentiment may have improved, exchange-traded fund flows attest that mainstream investors are not exposed to the healthcare area in any significant way. Meanwhile, the sector continues to innovate, as evidenced by stunning clinical data, regulatory approvals and commercial launches exceeding expectations. Though equity investors may have missed the related memo, large biopharmaceutical companies seeking to replenish the tens of billions of dollars of revenues that will likely fall to generic competition over the next few years have clearly wasted little time putting cash to work.
Looking ahead, we see the healthcare sector as a prime beneficiary of artificial intelligence-enabled technologies when it comes to furthering innovation, but also improving access and affordability, as waste and inefficiencies are reduced allowing for more intelligent and prospective healthcare investment around the globe. As the US looks to level the investment playing field, there will be opportunity for others to step up to the plate. Irrespective of geography, our investments will naturally follow wherever innovation abounds and the best and brightest companies are enabled to lead.
Increasing fundamental clarity offering timely growth alternative
James Douglas
Fund Manager, Team
Gareth Powell
Head of Healthcare, Team
As the year progressed, 2025 reassured investors that the sector clouds gathering into the New Year were out of touch with fundamental realities. Historically attractive valuations also compelled acquirers to act in force, lending additional assurances and ultimately leading to a banner year for M&A. While the healthcare sector ends the year on a firmer footing, we would argue that until more recently the market’s attention has been elsewhere. As funding and the returns on technology-related capital investments are increasingly being called into question, healthcare would seem a natural home for growth investors looking to diversify.
Our investments will naturally follow wherever innovation abounds and the best and brightest companies are enabled to lead. Although sentiment may have improved, exchange-traded fund flows attest that mainstream investors are not exposed to the healthcare area in any significant way. Meanwhile, the sector continues to innovate, as evidenced by stunning clinical data, regulatory approvals and commercial launches exceeding expectations. Though equity investors may have missed the related memo, large biopharmaceutical companies seeking to replenish the tens of billions of dollars of revenues that will likely fall to generic competition over the next few years have clearly wasted little time putting cash to work.
Looking ahead, we see the healthcare sector as a prime beneficiary of artificial intelligence-enabled technologies when it comes to furthering innovation, but also improving access and affordability, as waste and inefficiencies are reduced allowing for more intelligent and prospective healthcare investment around the globe. As the US looks to level the investment playing field, there will be opportunity for others to step up to the plate. Irrespective of geography, our investments will naturally follow wherever innovation abounds and the best and brightest companies are enabled to lead.
James joined Polar Capital in September 2015 and is a Fund Manager for the Healthcare team. He was appointed Co-Fund Manager for the Polar Capital Global Healthcare Trust alongside Gareth Powell in August 2019.
Prior to joining Polar Capital, James worked in equity sales specialising in global healthcare at Morgan Stanley, RBS and HSBC. James also has equity research experience garnered from his time at UBS, where he worked as an analyst in the European pharmaceutical and biotechnology team. Before moving across to the financial sector, he worked as a consultant for EvaluatePharma.
Gareth Powell, CFA
Gareth joined Polar Capital in 2007 to set up the Healthcare team. Prior to Polar Capital, Gareth worked at Framlington, where he began his career in investment management in 1999. Soon afterwards, he joined the Healthcare Team in 2001 and helped launch the Framlington Biotech Fund, which he managed from 2004 until his departure.
Gareth studied biochemistry at Oxford, during which time he worked at Yamanouchi, a leading Japanese pharmaceutical company (later to become Astellas). As well as this, Gareth worked for the Oxford Business School and various academic laboratories including the Sir William Dunn School of Pathology and the Wolfson Institute for Biomedical Research.
