The activity related to the elderly, a market of the future.

Since the 1850s and the industrial revolution, the growth of the world population has been increasing steadily. In 2017, there are about 7.6 billion people in the world, 962 million of whom are over 60 years old. According to a UN report, there will be 11.18 billion of them, including 3.1 billion over 60 years old by the end of the century. Growth will therefore represent more than 222% for this segment of the population compared to 47% for the overall population. So, have a look on this: The activity related to the elderly, a market of the future.

If we compare these figures with data on economic activity related to the elderly, we can see that there is a strong potential in this market. Thus, according to the Director of Global Thematic Management at CPR AM Vafa AHMADI, “for more than 15 years, companies linked to ageing have had an average growth rate in turnover and results that are higher than the rest of the economy (between 1 and 1.5%) and a lower cost of capital”.

Similarly, Bank of America Merill Lynch now estimates the silver age industry at $7 trillion and could reach $15 trillion by 2020, an increase of more than 200%.

market

Even if these economic data remain projections, the market retains the growth potential of older people’s activity in relation to demographic data. In addition to this structural trend of the silver age, its purchasing power is linked to the importance of the assets held by this segment of the population, which reinforces the hypothesis of a positive evolution of this market.

These are the reasons why the financial markets are interested in the activity of the elderly. In recent years, several UCITS/SICAV funds have emerged that specialise in the silver age business. These funds mainly include the health, financial services and cyclical consumer sectors that provide solutions for people over 55.

The main funds dedicated to this sector in France are Generali Investments Sicav SRI Ageing Population, CPR Global Silver Age (Europe), CPR Silver Age (world), LO Funds – Golden Age, Schroder International Selection Fund Global Demographic Opportunities, Robeco Global Consumer Trends Equities and Performance Vitae.

To conclude, we can also add a psycho-behavioural component to this subject with the evolution of generations and mores. Children no longer necessarily live close to their parents’ home due to increased mobility and telecommunications. It is now possible to “take care of your parents at a distance”. Thus, it is not uncommon today to have people over 60 years of age alone or with their spouse who need care or home help services and who have little or no opportunity to travel.

The solutions proposed by the silver age companies then take on their full meaning because they adapt to these new parameters and enable these people to be cared for at home. In addition, there is a real need for autonomy for these people, which is likely to lead to the emergence of innovative services based in particular on new uses of artificial intelligence in full development.

One example is a person in need of 24/7 assistance, it may be financially difficult to assume and practically impossible to find a solution other than a retirement home but can be accomplished effortlessly by a robot at a lower cost and perhaps under more satisfactory conditions for the population concerned, the inadequacy of staff and resources in retirement homes being regularly pointed out.

 

Sources: Bank of America Merill Lynch, UN, Morningstar
http://www.morningstar.fr/fr/news/148800/profiter-du-%C2%AB-papy-boom-%C2%BB- with-a-management-th%C3%A9matic.aspx
http://www.lemonde.fr/planete/article/2017/06/22/la-population-mondiale-atteindra-9-8-milliards-d-habitants-en-2050-selon-l-onu_5149088_3244.html

Pierre PAPAPHOTIOU

Pierre PAPAPHOTIOU

Titulaire d’un master 2 en gestion de patrimoine de la Paris School of Business, Pierre Papaphotiou a réalisé ses deux années de spécialisation, en alternance, en tant que conseiller privé au LCL. Lors de sa troisième année d’études à PSB, il a réalisé une année d’échange en Angleterre à l’université de Manchester. Afin de développer une expertise complémentaire en finance de marché, il a intégré la promotion 2017-2018 du pôle trading de l’ESLSCA.


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