WEBVTT - Primetime's Bet on the Aging Space

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Steneveek on Bloomberg Radio. Well, if you check out the

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<v Speaker 1>Bloomberg original series The Future with Hannah Fry, you may

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<v Speaker 1>have come across an episode that looked into how a

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<v Speaker 1>scientific revolution has begun, one that may bring the fantasy

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<v Speaker 1>of immortality a little closer to reality, at least by

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<v Speaker 1>a few decades. Anyway, researchers the world over are closing

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<v Speaker 1>in on discoveries that may help humans live longer, perhaps

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<v Speaker 1>well into their one hundreds. So we have lots of

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<v Speaker 1>conversations and lots of questions about wellness and living longer

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<v Speaker 1>and lifespans in general. In the meantime, investors, including Primetime Partners,

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<v Speaker 1>are finding ways to bet on the world's aging population.

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<v Speaker 1>So with us in our studio is Abby Miller Levy.

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<v Speaker 1>She's co founder marging partner of the early stage venture

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<v Speaker 1>capital firm focused on the trillion dollar global aging sector.

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<v Speaker 1>There's a lot going on. The firm is Primetime Partners,

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<v Speaker 1>co founded, by the way, with longtime venture capitalist Alan

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<v Speaker 1>Patrick ofv Welcome. Thank you so much, coming a little

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<v Speaker 1>bit so we can hear you, because we want to

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<v Speaker 1>make sure it's absolutely talk to us a little bit

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<v Speaker 1>about the aging space and how you guys think about

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<v Speaker 1>it as investors, because there is a lot going on.

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<v Speaker 1>But it could be you know, housing for people aging,

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<v Speaker 1>it could be healthcare, So how do you think about it?

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<v Speaker 2>Absolutely, there are so many parts of how we think

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<v Speaker 2>about the longevity sector. And if you think about it

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<v Speaker 2>this way, if you ask ARP, for example, they do

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<v Speaker 2>surveys all the time of older adults and they say,

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<v Speaker 2>what do you care about? And they care about their health,

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<v Speaker 2>they care about financial independence, and they care about having

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<v Speaker 2>meaningful experiences, and so that means basically, in my mind,

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<v Speaker 2>gravity means all of health care, all of retirement and

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<v Speaker 2>wealth management, all of consumer and media, and as well

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<v Speaker 2>as housing and real estate, and so it's quite a

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<v Speaker 2>broad industry. As investors, we're focused on the early stage

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<v Speaker 2>and we age tech as it's now called, had about

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<v Speaker 2>two point three trillion dollars of investments, sorry, billion dollars

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<v Speaker 2>of invests just in twenty one and twenty two. It's

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<v Speaker 2>really an emerging space. I liken it to where climate

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<v Speaker 2>tech was twenty years ago. Everybody understood that climate change

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<v Speaker 2>was not everyone, there was a widespread there was a

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<v Speaker 2>lot of data. Yes, there was a lot of data

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<v Speaker 2>that said climate change is happening and we need to

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<v Speaker 2>address it as a society. This seismic shift in our age

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<v Speaker 2>demographic that this is not new information. The fact that

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<v Speaker 2>twenty five percent of the US population will be over

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<v Speaker 2>the age of sixty five by twenty fifty thirty percent

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<v Speaker 2>in Japan, this is not new information. The question is

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<v Speaker 2>how do we adapt to it, the same way that

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<v Speaker 2>the climate tech industry and has had to adapt to

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<v Speaker 2>this new reality. So that's how we really think about it.

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<v Speaker 2>There's a lot of opportunity, but we have to in

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<v Speaker 2>some ways prompt and nudge and push on the urgency

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<v Speaker 2>of the topic.

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<v Speaker 3>Well, there are a lot of problems then to be solved, right,

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<v Speaker 3>because especially if people are retiring at sixty five seventy

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<v Speaker 3>and they've on the financial side of it, they're ready

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<v Speaker 3>for maybe another twenty years, possibly thirty, But what the

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<v Speaker 3>data is showing is that they could go for another

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<v Speaker 3>fifty years. Right, So absolutely, I guess there are problems

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<v Speaker 3>that need to be solved in terms of how they

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<v Speaker 3>finance it. The healthcare bill is going to be off

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<v Speaker 3>the charts, right, and then for meaningful experiences where they

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<v Speaker 3>going to.

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<v Speaker 2>Do absolutely well. You know, one of the most pressing

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<v Speaker 2>problems is that fifty percent of Americans don't have retirement savings.

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<v Speaker 1>That's what I think about. How if you're living longer, yay, yes,

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<v Speaker 1>if you don't have the money to support yourself, not

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<v Speaker 1>so great.

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<v Speaker 2>Well, I think there's a few things. One is, you know,

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<v Speaker 2>our individual choices. You know, average retirement age right now

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<v Speaker 2>is sixty two. That hasn't changed much in the past

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<v Speaker 2>few years. We are going to need to work longer,

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<v Speaker 2>but that was incredibly young exactly. Then you have forty

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<v Speaker 2>more years of basically acid dcumulation versus A cumulation, and

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<v Speaker 2>so that is a major choice we have to make.

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<v Speaker 2>And are also given agism in the workplace and things

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<v Speaker 2>like that. We need to really work on workforce longevity,

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<v Speaker 2>but also real changes in forcing retirement savings and so

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<v Speaker 2>really excited that the government do that. Well. A couple

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<v Speaker 2>of things. The Secure Act two point zero was the

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<v Speaker 2>first time that by twenty twenty five, employers who offer

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<v Speaker 2>four to one k's are going to have auto enrollment.

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<v Speaker 2>In other words, instead of saying to someone at twenty, hey,

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<v Speaker 2>would you like to save now, do just do it,

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<v Speaker 2>and there have been studies done by Bank of America

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<v Speaker 2>that show basically that increases participation by five x. And

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<v Speaker 2>so what Oftentimes, in my role as an investor in

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<v Speaker 2>the space, friends and family always ask me, you know, Abby,

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<v Speaker 2>what's the secret to longevity? As if I know some

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<v Speaker 2>secret pill. And by the way, there's a huge biotech

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<v Speaker 2>industry focus on this. I always say, and they're very

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<v Speaker 2>just kind of it's not as sexy an answer, but

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<v Speaker 2>I say, max out your four to one k that's

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<v Speaker 2>the secret to longevity, because if you don't have financial longevity,

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<v Speaker 2>you will not have a lesser chance of having a

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<v Speaker 2>decent health span. And we are starting to see that

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<v Speaker 2>people in their twenty and thirties right now are investing

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<v Speaker 2>at higher rates in their four to one k's than before.

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<v Speaker 2>And in fact, one of our portfolio companies is called Penelope.

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<v Speaker 2>What they do is they allow solopreneurs and micro business

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<v Speaker 2>owners to offer four to one k's at reasonable prices,

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<v Speaker 2>because as a small business owner or even a gig

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<v Speaker 2>economy worker, you should be able to have your own

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<v Speaker 2>four to one k and as a self employed person,

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<v Speaker 2>so we really see that as an opportunity in terms

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<v Speaker 2>of retirement savings to think about that. The other interesting

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<v Speaker 2>part of the industry is really going to be around

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<v Speaker 2>acid dcumulation. Most of our financial services sector is focused

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<v Speaker 2>on accumulation. If you think about decumulation, this is everything

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<v Speaker 2>from now that you have these four to one k's

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<v Speaker 2>most people they're sitting in. First of all, most people

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<v Speaker 2>have an average of seven retirement accounts. If you have

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<v Speaker 2>retirement accounts, because every time you move employers or out

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<v Speaker 2>of work and do a roth IRA or an IRA,

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<v Speaker 2>then you have all these accounts and they are these

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<v Speaker 2>small sums of money sitting typically in passive investment accounts.

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<v Speaker 2>So another business we really like is a business called

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<v Speaker 2>Retireble that basically allows you to put them all together

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<v Speaker 2>and then look at, actually, how do we invest or

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<v Speaker 2>think about even drawing a paycheck our retirement saving so

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<v Speaker 2>you're really thinking about it differently. And also, of course

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<v Speaker 2>home equity. You know, the majority of older adults eighty

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<v Speaker 2>seven percent own their have home equity, and so how

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<v Speaker 2>do you think about that as a bank account, and

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<v Speaker 2>really without the punitive products that may have existed or

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<v Speaker 2>this you know, sense of it is, it has only

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<v Speaker 2>emergency funding. How do you really think about it actively

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<v Speaker 2>as funding.

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<v Speaker 1>You do say early stage that you guys go into,

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<v Speaker 1>where are you seeing the most kind of company creation?

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<v Speaker 1>Is it in the financial products? Is it in how

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<v Speaker 1>we live? Is it how we experience? Is it healthcare?

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<v Speaker 2>It's absolutely in healthcare. Yeah, so two thirds of our

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<v Speaker 2>investing is in healthcare, and healthcare, you know, is still

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<v Speaker 2>the largest, you know, one of the largest contributors of

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<v Speaker 2>our society. And older adults consume two thirds of all

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<v Speaker 2>health care spent. So there's really incentives on everybody side.

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<v Speaker 2>The government that pays for sixty five percent of older

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<v Speaker 2>Americans health care, the health plans, insures, and you know,

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<v Speaker 2>pharmac everybody is incentive to figure out how we take

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<v Speaker 2>better care of older adults.

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<v Speaker 1>So how do you So what do you invest in?

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<v Speaker 1>I'm curious the kind of companies that are come up

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<v Speaker 1>on your radar and you say, okay, this is something

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<v Speaker 1>of interest.

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<v Speaker 2>Absolutely Honestly, you follow the money, and where the money

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<v Speaker 2>is is basically in figuring out how to reduce the

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<v Speaker 2>cost of care and how to make care more accessible.

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<v Speaker 2>If I had to bucket it into two buckets. Again,

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<v Speaker 2>we don't do pharm our biotech, So that's something that's

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<v Speaker 2>not in our purview, but within our purview, it's reducing

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<v Speaker 2>cost of care. So, for example, anything that would prevent

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<v Speaker 2>an older adult from hospitalization. A hospitalization can cost a

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<v Speaker 2>health plan anywhere from fifteen to twenty thousand dollars. So

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<v Speaker 2>reducing hospitalizations might be nutrition, might be, medication adherents might

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<v Speaker 2>be fall prevention might be even things such as updating

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<v Speaker 2>your home to make sure that there's safety within the home.

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<v Speaker 2>So we've invested in several solutions that sell into health

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<v Speaker 2>plans to say, hey, let's prevent these hospitalizations that have

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<v Speaker 2>clinical results and data to show we can prevent hospitalizations.

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<v Speaker 2>So that's one example on the accessibility front. I mean,

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<v Speaker 2>I'm sure most of the listeners here recognize that COVID

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<v Speaker 2>changed everything in terms of telemedicine.

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<v Speaker 1>Right.

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<v Speaker 2>Telemedicine wasn't a was very infrequently a reimbursable experience before COVID,

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<v Speaker 2>but it was basically built into our healthcare system now

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<v Speaker 2>as a way to deliver care. So we've invested in

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<v Speaker 2>many businesses that frankly make telemedicine more accessible from an

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<v Speaker 2>infrastructure layer, a company called open Loop, and then about

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<v Speaker 2>a third of our investments use telemedicine as a delivery

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<v Speaker 2>and accessibility mechanism. And we're looking at other businesses, you know,

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<v Speaker 2>and I know everyone's very focused on AI, you know,

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<v Speaker 2>within healthcare. What's really interesting is you think about the

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<v Speaker 2>word care. Healthcare, particularly for older adults, has always been

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<v Speaker 2>a service business. There's a human involved. And where does

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<v Speaker 2>AI do a wonderful job? It does a wonderful job

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<v Speaker 2>of making human interactions faster, easier, and more personalized.

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<v Speaker 1>We talk about this. I don't know if this is

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<v Speaker 1>where you're going. And forgive me if I'm like off

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<v Speaker 1>in a crazy way, but just this whole idea of

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<v Speaker 1>older people who are who are lonely, this idea of

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<v Speaker 1>creating a robot or something that can I know, Matt,

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<v Speaker 1>you're looking at me like I'm crazy, but I've seen

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<v Speaker 1>it firsthand and it's devastating. And whether there can be

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<v Speaker 1>in interactions. I know you think.

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<v Speaker 3>I don't think that's crazy. I did a story on

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<v Speaker 3>that like twenty years ago. My thing is, I wonder

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<v Speaker 3>how high valuations are right now, because I'm sure a

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<v Speaker 3>lot of people want to get into this space. It's

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<v Speaker 3>an incredible demographic, right.

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<v Speaker 1>Sure, Well, I just got about twenty seconds important.

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<v Speaker 2>So robots we're less excited about. We're excited about technology

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<v Speaker 2>enabling meetups, live, you know, experiences. It's really human to human.

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<v Speaker 2>But on valuations, just like everybody else, valuations have come

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<v Speaker 2>down back to i'd say, you know, twenty nineteen levels

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<v Speaker 2>on many companies. But because we invest early stage, early

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<v Speaker 2>stage has largely been protected from the valuation perspective. I

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<v Speaker 2>think the one thing that has changed is people are

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<v Speaker 2>focused on profitability and making their money last.

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<v Speaker 1>We have to run, come back soon. We'll do all right,

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<v Speaker 1>Abby Miller Levy. She's a co founder managing partner at

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<v Speaker 1>Primetime Partners. Here in Studio