Miklós Mohai, Managing Director

Futurmed was founded as a kind of “asset management start-up” by Csaba Lantos in 2007, after he left his position as Deputy CEO of OTP. Initially, the portfolio consisted specifically of healthcare investments, mainly from companies with a service and retail profile, which over time expanded to include a so-called “life science” focus. The company functions as a family office, but while, in the business culture of English-speaking countries, such a formation manages the wealth of wealthy families, in this case the mirror translation is more accurate: the company’s statistical headcount is three, which increases only by a few in the course of practical work. “We’re basically looking in three directions. The first category includes healthcare companies that are not only able to make a profit in their operations, but can also make a difference in their own industry—whether through industrial or service innovation—that benefits the wider society”, said Miklós Mohai, the company’s Managing Director. A good example of this is their company that sells diabetology products, blood glucose meters and test strips, which, Mohai says, has forced a clear technological leap out of the sector. But the portfolio also included a private hospital, where high quality, professional work was carried out, based on strong market demand.

Another direction is innovative, early-stage industrial development companies that may not have a finished prototype at the time of investment, but show or have already demonstrat- ed some market potential. For this type of innovation, it is now natural that the components come from all over the world, but it is important that the product is ultimately manufactured in Hungary, and that they can have as big an international presence as possible in sales. One such investment is Norma, which is developing a medical instrument to help diagnose specific diseases and is attracting international attention in both the human and veterinary fields.

And to balance the healthcare-focused portfolio from a risk perspective, they are also interested in financial and real estate investments. “Even though we have identified healthcare as our main focus, we may also invest in, say, a machine tool company, because sometimes there are simply opportunities that, although not part of the portfolio, have great business potential”, he added.

They are quite actively involved in the operations of companies as an investor, which limits the size of the portfolio they can manage with the right activity, while there is no shortage of opportunities: they receive inquiries from 200-300 companies a year, of which they are good at negotiating with 10-20%, and only in a few cases do they make an investment decision.

Managing a diverse portfolio is not easy. They have already given up on the idea of coordinating the operations of these companies from a professional point of view and building a classic group of companies where synergies can be exploited, for example by a common accountant. “There are so many companies, so many interests, and it’s terribly difficult to get them all at the same table, so we try to instead deal with issues that affect several companies in small groups. Synergies can also be exploited in this way, by developing collaborations with a few actors”, said Mohai.

According to the CEO, two important aspects distinguish Futurmed in the market. One is that they take a long-term view and do not let the time pressure of closing a fund determine their investment. They do not have the exposure–management–closure life cycle of other investment funds, and can decide at any time to make a follow-on investment, to participate in a second or third round of financing.

“The latter has helped a lot of our investments through difficult times”, he added. In addition, they have always managed to achieve a return of over 10% on their large exits, which they consider a good performance given the investment horizon of more than 10 years. They also maintain flexibility in the case of potential exits, which Mohai puts as “nothing is sold, but everything is for sale”. In practice, this means that they have up- to-date information on any of their investments at any time, which they can pass on and are ready to act quickly.

So far, the company has almost exclusively relied on its own resources, with preferential credit facilities as a supplementary source, but they want to change this in the future. Whether to go public or issue a bond, or a combination of the two, has not yet been decided, but Mohai says the company has the potential to go public: “We can offer potential investors a balanced portfolio, with mature businesses that are making a profit, businesses that are on the cusp of doing so, and fresh ideas that, if we get them to market with the right funds, will be very successful”.

The CEO believes that Hungarian engineering and medical knowledge is outstanding and that there are many companies in Hungary that can come up with innovations that are of firstclass quality. This is why they focus on start-ups that can use Hungarian knowledge to produce an internationally competitive product or provide a service of this calibre, which can help them to enter and succeed in large international markets