Is Longevity The Next Big Investment Opportunity?

Is Longevity The Next Big Investment Opportunity?

In the early 19th century the average human life expectancy was 31 years of age. That’s now an age at which most still consider themselves to be ‘young adults’. It’s also how the economy considers 31 year olds. In the developed world, we are increasingly not embarking upon ‘adult life’ as entailing financial dependants, planning financially for retirement or even moving onto the property ladder until we are at least 30. That huge shift in demographic trends is because as of 2018, average human life expectancy is 71.4 years of age. In the countries with the longest longevity, Iceland, Switzerland and Australia, that has risen to over 85, even for men who statistically die younger than women.

Environmental factors have, according to UK investor Jim Mellon, who co-authored Juvenescence – Investing in the Age of Longevity, along with Al Chalabi, been behind that huge leap in the age we can expect to reach. The book explores new longevity technologies and how to benefit from them both in terms of giving ourselves the best chance of living longer and as an investor. Sanitation systems and standards, infant mortality rates, health & safety standards dramatically reducing our chances of a fatal accident in the workplace or during our daily lives and the discovery of antibiotics have been the most influential of those environmental factors.

However, recent leaps forward in the science of biotechnology promise another huge stride forward for human longevity. Because are learning how to manipulate our fundamental biology. Many scientists believe that within the next two or three decades we will have mastered how to turn back the clock of the ageing process on a cellular level. This field of biotech is termed ‘pluripotent stem cell work’ and involves returning cells to their original stem state. While still in its infancy, pluripotent stem cell research is likely to have a fundamental influence on the treatment of degenerative diseases from Alzheimer’s to many forms of heart disease and conditions such as arthritis and muscle, joint and bone density degeneration as we age.

It might sound like science fiction but early stage drugs in this area are showing considerable promise. Ageing mice given a compound called NAD+ have been shown to demonstrate changes in their general health that results in them regaining a condition that would be expected of animals half their age.

While much of the work in the longevity field is being carried out by small start-ups, any progress will quickly lead to them being snapped up by a much bigger company able to commercialise promising longevity drugs. Google-parent Alphabet’s life sciences company Verily, whose focus is longevity, has just raised external investment totalling $1 billion. Longevity is big business as any technology or pharmacy that does manage to pass clinical trials will have every human alive as a potential customer.

As well as pharmaceuticals and biotech, the promised advancements in longevity also open up many other potential investment opportunities that will result from any significant demographics shift. Industries such as care homes and specialist services targeting the over 65s have already seen huge upticks in investment over the past decade as lifespans stretch. Biosciences are, however, the real gold mine.

However, as a private investor, trying to successfully stock pick small biotech companies to invest in is hugely risky. It makes investing in early stage oil and gas exploration look like a safe bet! Luckily, there are growing number of specialist funds in the biotech, life sciences and longevity niche. These allow investors to spread their risk by investing in tens to hundreds of prospective companies of different sizes and stages of development.

It’s still a risky sector due to its immaturity but with a long term view, these funds probably only need a very small percentage of these companies to come through to generate attractive returns. And the managers of these funds have the advantage of being able to rely on the advice and research of teams of expert analysts, many of whom will have a scientific background.

That doesn’t, of course, guarantee success but it at least increases the chances of it significantly. And if you are going to unexpectedly live to 120 as a result of advancements in longevity biotech over the coming decades, having invested in some winners in this sector will certainly be a welcome help to funding those bonus 40 years in a way that means they can be enjoyed!

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