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Portfolio > Alternative Investments > Real Estate

Aging population offers golden opportunities

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There’s gold in that there silver. Hair, that is.

According to research from PGIM, the global investment management business of Prudential Financial, aging populations worldwide will create investment opportunities across real estate, health care and technology sectors.

In its report “A Silver Lining: The Investment Implications of an Aging World,” PGIM presents the case that 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 — where two-thirds of the world’s elderly live.

With retirees spending more — collectively controlling an increasingly significant share of global wealth and spending — overall consumption patterns are changing dramatically, and the report says that companies will need to rethink the products and services they offer. In the U.S., retirees already spend more than millennials.

Within the three sectors to be most affected, specific opportunities exist in multifamily condos, senior housing, urban life sciences clusters, pharmaceuticals and biotech and technology-enabled medical services and devices.

Real estate, the report said, 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 investment themes: the move by seniors from homes into centrally located condos in cities; increasing demand for senior housing, not just in the U.S. but from the U.K. to China and Japan; and real estate that will be required by biotech startups, established medical companies and research centers that typically cluster around universities.

When it comes to health care and technology, the report points to pharmaceutical and biotech firms, where it says investors can find opportunities among venture capital firms whose operating companies target diseases such as dementia, stroke, cancer, Alzheimer’s, and Parkinson’s.

Look also to “silvertech: businesses 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.”

“Long-term institutional investors,” Taimur Hyat, chief strategy officer at PGIM, said in a statement, “should holistically evaluate the longevity megatrend and consider capitalizing on the opportunities it will bring.”

See also:

Behind the scenes of the new longevity estimates


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