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​As my parents age, I’ve become more aware the vulnerability of the elderly and how even small things can make a difference to the less spry. It is endearing to see the appreciation given when an older person needs a seat on a train and someone gives that seat. However that small act of benevolence is a far cry from caring for someone with Alzheimer's, which many millions do daily. With the latest technology boom, encompassing the sharing economy, internet of things, big data and smart-phones as health monitors – old age for the elderly themselves, their families and the care-givers should be easier to cope with and with a better quality of life for all?

As an investor – one always looks to be part of a macro trend, especially one where you can do well by doing good, and one thing is for sure – we will all be affected by this if not through family, then as we age ourselves. Taking part in this trend before we join the elderly ourselves is surely a most sensible act.

​China's working age population has started shrinking and it is going to have a huge over-65 population in the near future — meaning that it will see the same kinds of problems as ageing developed markets like Japan.  How the younger population supports a growing ageing population?

Thus, healthcare demands seen worldwide will be accentuated in China – exacerbated by the one-child-policy.
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Listed equities focused on the elderly
Are there any pure play indexes on the stock market?
There is at least one based on a basket of stocks from the S&P. Unfortunately, it is underperforming the S&P year to date however as with any macro trends – the target is the long-term. This index:
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Motif Investing Index 
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Includes stocks in assisted living, Diabetes care, medicare insurers, orthopedic care products, retirements homes. Also, nowadays you can construct your own index with stocks which focus on elderly care homes or tech companies related to the elderly. Here are three US examples that could be used from Fool.

Fool ElderCare Index 
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Excerpt:

1. HCP is a real estate investment trust, or REIT, focused exclusively on the healthcare sector. HCP's real estate portfolio includes hospitals and medical office buildings, along with senior living facilities.
2. Kentucky-based Almost Family was founded nearly 40 years ago. The company is the fourth-largest home healthcare provider in the United States with over 250 branch locations in 14 states.
3. If you live in the Sun Belt, you might be familiar with Ensign Group. Currently, its portfolio includes 204 healthcare facilities, ranging from skilled nursing, home healthcare, hospice care, assisted living and urgent care companies--many in Sun Belt states.    

By far the easiest way to get exposure to the macro trend is through listed companies – what premium do you pay for partaking in the macro trend? now that’s where it gets tricky and deep fundamental analysis is required. 

Private equity focused on the elderly

Are there any pure plays funds? No however many PE funds are now investing in care homes (and some causing some controversy as they go).

Examples are:
Bridgepoint invested in Care UK in 2010 – 85 care-homes, 17,000 clients.
Blackstone  - southern cross, UK

How to get exposure to this trend? For the retail investor - not possible. HNWs and Family offices yes.

This area of investing will draw the greatest analysis from the government as these are profit making entities in an area that the government really feels they need to monitor for the good of all – health and education draw this type of attention and rightly so. As always the private sector will cater to the sharp end of the pyramid, where people can afford to pay a premium. The base of the pyramid for care will need to be run by or subsidized the governments. And here is where costs will be keenly felt - and this is where VC has a role to play. Better care at a lower cost through technology keeping people at lower cost in their own homes for longer where everyone is happier.

VC focused on the elderly

Are there any pure plays? Not yet, however funds are viewing this as a genuine macro trend which will boost the returns of many of their portfolio companies. The trick will be to an elderly focus designed in to any new hardware or software from the start – catering for ease of use as people struggle with loss or hearing, sight and dexterity. 

How to get exposure to this trend? Through VC funds that have it as part of their prospectus – I am yet to see a dedicated elderly technology fund.
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*There are numerous technology examples from self-driving cars to remote health monitoring and diagnosis through wearables. Edema socks automatically measure and log swelling of the legs of sufferers. The wearer’s doctor is automatically notified if measurements trigger an alarm. Same idea for diabetes socks. Self-driving cars will enable the elderly to be mobile again safely and without fear. Here are more examples.

Technology for Seniors 

Smart homes with voice controls – again a product that is not aimed at the elderly alone however the User Interface will surely have to work for people as they become harder of hearing, seeing with restricted movement thus needing even more automation through machine learning.
A novel example from the valley is elderly home care job site – Honor  (founded 2014) which recently took in $42m of investment including capital from Andreessen Horowitz. This is a marketplace for caregivers vetted by families with the aid of Honor.

Another example is Care.com, founded in 2006 by Sheila Lirio Marcelo,  which is an all service site that helps families find care for all sorts of situations, including senior care and has a revenue of 60 million USD per year. 

All of these technologies can be part of updated care homes – or even allow the elderly to live at home for much longer safely. The communications may have the largest impact as loneliness is one of the most feared aspects of getting old.

Impact investing focuses on the third world and social mobility to a large degree– caring for the elderly has a claim to be part of the impact investing genre. We will all feel the benefits one day as the infirmity of our own old age becomes more real.

​By John Rowland

The Parthenon in Greece has been studied by architects for decades into the construction of its intricate design. Each column was sized differently to give the illusion that the building was rising towards the sky instead of sinking into the ground.
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In addition, the sewage systems of Ancient Rome have been used by our contemporary society to move bodies of water across cities; the cathedrals of Italy have been the study and backdrop of many Hollywood films; and despite that the cities of Berlin, Hiroshima and Nagasaki had been destroyed and relentlessly bombed in WWII, the cities have re-emerged as landmark urban planning powerhouses, with Berlin becoming an architect's ideal playground for modernist architecture, and Nagasaki and Hiroshima exhibiting its playful, experimental architecture.

The Ribbon Chapel in Hiroshima, Japan. After the city was devastated by the atomic bomb in WWII, Hiroshima re-surfaced as an experimental architectural design centre with the govt and many corporations investing in the infrastructure of the city.

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​European and Japanese architects have always been forward thinking; they build things to last and often plan ten years ahead of what they will build, and how they will shape their cities. This is something that has encapsulated the landscape of cities like London, Tokyo, Basel, Antwerp, Berlin.
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Former Chancellor George Osborne is the brainchild behind the Northern Powerhouse Project, a long term economic plan to revitalise the northern cities of England.

One of the legacies of former Prime Minister David Cameron and former Chancellor George Osborne is the Northern Powerhouse Project, the U.K. govt's plan to boost economic growth by building new transportation links via the Northern Powerhouse Rail, and investment in science, innovation, architecture, urban planning and of course, modernising the infrastructure of the northern cities of Manchester, Liverpool, Leeds and Sheffield, which were previously centres for manufacturing and coal mining at the turn of the century. In 2015, Mr. Cameron accounced that the Northern Powerhouse Project would be backed by China, and plans were developed for the Chinese Cluster project at the Manchester Airport and a further £800m would be invested as a joint business development between British and Chinese companies. Another competition was announced to host the Great Exhibition of the North in 2018, as towns and cities across the North East, North West and Yorkshire were invited to showcase the best of art, culture and design.

Currently, the city of London is also building its highest residential skyscraper in Canary Wharf which is projected to be finished by 2020. It will be 67 storeys high and valued in excess of £800 million. The project is being lead by Chinese property developer Greenland Group, and will be the same height as Canary Wharf's highest skyscraper, One Canada Square.
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Let's hope that the project won't turn out to be a debacle such as San Francisco's Millennium Tower, a 58 storey residential condominium tower which was built from 2004-2009. I remember I was in San Francisco during parts of the construction phase after my I finished my M.A. degree in 2005, and not only was it an outrageous and loud eyesore then, it is still an appalling eyesore now. It is a lackluster, generic looking high tower, and despite garnering 9 prestigious awards by the American Society of Civil Engineers, California Construction's Outstanding Project Management Award, and San Francisco Chamber of Commerce Excellence in Business Awards, it was revealed just last month that the building is sinking and substantially leaning to one side, revealing its structural deficiencies. Why is it sinking? The answer is very simple, the architecture and engineering team cut corners and the Millennium's engineers anchored the building over a thick concrete slab with piles driven into 80 feet into dense sand as opposed to drilling piles into more secure bedrock, to save costs.
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The 58-storey Millennium Tower in San Francisco. One side of the building is visibly lifting off the ground and leaning towards the other side. It was revealed this year that the building is rapidly sinking into the ground due to the engineers' "cost-cutting" methods of having built the structure into a slab of concrete in sand instead of bedrock. When the construction was first finished in 2009, the Millennium Tower won numerous awards for its design and engineering.

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​This kind of "cutting corners" measure in Californian urban planning and engineering has probably been in effect since post-WWII, when it became normal to erect temporary buildings not made to last, and everything was built cheaply and quickly, often using cheaper alternatives that have later been discovered to be toxins. California schools and buildings resemble temporary bomb shelters rather than places that are suppose to inspire the next generation of thinkers and innovators. However what is especially disturbing is the way some of these Californian developers have a philosophy of cheap building methodologies that actually have more severe consequences
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Malibu High School is an example of poor architectural and structural design. In addition, many teachers signed a petition in 2013 to test the buildings for cancer causing materials after an unprecedented number of teachers and students were diagnosed with cancer and thyroid disorders. It was found that Malibu High School was contaminated by polychlorinted byphenyls (PCB) during its construction, banned by U.S. Congress in 1976. A recent Harvard study said up to 1/3 of America's schools, constructed between 1950-1980 may contain toxic PCBs.

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Last summer, in June 2015, six Irish students on a summer exchange died from a balcony collapse on Kittredge Street in a relatively newly built condominium building in my hometown of Berkeley, California. The students were having a normal party, and several of them went out in the balcony, when suddenly it gave away, killing six students who were studying for the summer at UC Berkeley. There were seven survivors from the incident and one paralysed from a broken spinal cord. The developer who constructed the building didn't build proper support for the balcony in order to "save costs". In response, a representative of the building said that the balcony "wasn't for hanging out, it was really designed for one person to occasionally take a breath of fresh air for a few minutes".
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Six Irish exchange students died and seven were severely injured from a collapsed balcony in Berkeley, California last summer. The balconies had no structural support either on the sides or underneath the balcony due to cost-cutting measures. Surprisingly, this style and design is reflective of contemporary condos built all throughout California.
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The more disturbing fact is that this condo was built in a style and design that has popped up all over California. The company, Segue Construction was fined, but it was actually designed by Thomas P. Cox Architects of Irvine, California; in a "cost-cutting" design that is ubiquitous with California style condos. As one can see from their portfolio, they have designed similar buildings without any patio support in their construction as evidenced by this residential building in Los Angeles. 
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In a typical residential development in the U.K., one can see that buildings usually have multiple structural support of its balconies, either on both sides of the balcony, or via steel beams underneath. London's architectural and construction development firms usually don't have the "cutting corners" mentality of its San Francisco and Berkeley neighbours across the ocean. The U.K. is known for its world-renowned architects (to the extent that U.S. corporations such as Google and Apple often award British architects to design their new buildings as opposed to American architects) and Britain isn't known to skimp on the design and development of its landscape.

The U.K. govt is spending £500m to get rid of these power cable eyesores built in the 1950s in all of their parks and countrysides and to move them "underground" to prevent a visual disturbance in the landscape. The reason why the U.K. does not have visible power cables in their cities is that the govt actively invested in moving them underground whereas, in nations such as the U.S., they used "cost-cutting" measures to simply put them up overhead.
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In fact, in 2014, the U.K. govt even invested £500m to remove the biggest and "ugliest" power cable lines across all of its beautiful countrysides. The National Grid will remove these pylons and move them underground- to retain the natural beauty of its landscape without the sight of this "visual noise" and will spend more than £10bln on new transmission lines by 2021. The "mistakes" of 1950s U.S. urban planning will not be repeated again in Britain as these kinds of chaotic power cables in the sky that are so reminiscent of cities like San Francisco, possess a serious eyesore to sensitive British aesthetics.
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San Francisco. The city did not invest in "undergrounding" their power and utility cables- leading to a chaotic mess of cables in the visual landscape which Europeans refer to as "visual noise".


In comparison, San Francisco is known for its chaotic power cables that criss-cross every which way that interferes with the view of the sky. To be fair, the entire Bay Area and Silicon Valley are located on a fault line, and prone to earthquakes, so it might not be feasible to have power cables underground; however, since San Francisco has an underground Muni and Bart, and LA has an underground subway, I don't see a problem with"undergrounding" a system of developing power cables underneath. Although it is initially expensive to invest in this type of infrastructure, the long-term value multiples over decades. However, the U.S. govt rarely spends any on the development of its landscape; rather, the U.S. govt is primarily infamously known for spending more on its defense fund than on its infrastructure, and any attempts by politicians to beautify a landscape or even build a high speed rail are often derided and or made a laughing stock. (i.e. California Governor Jerry Brown's plans to build a high speed rail from SF to LA was shot down by numerous proponents who called the project "too expensive").
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Anyone who has lived in Los Angeles will tell you that their roads and highways are a horrific apostasy to civilisation. Every street and freeway is marred with potholes, and the city never seems to have any funds to fix them, yet will go on mad ticketing sprees to issue and fine everyone for incorrect parking. However, the penny-pinching Californian urban development mentality can be accurately depicted by San Francisco, a city that likes to build things cheaply and quickly (e.g. Millennium Tower), purports a "lean" production mentality at their startups and even many of the workers in the city do not seem to realise that the unicorn companies they work for have created a poverty domino effect, increasing the city's homeless population.
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California Governor Jerry Brown has been for several years trying to approve the building of a high speed rail across California but has been mocked in the media by various opponents who criticise the project as "too expensive" whilst lobbyists are supporting the car manufacturing industries that want everyone to own an autonomous car.

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It's difficult to admit that a place where one has grown up is rapidly deteriorating via "cost-cutting" measures. It's difficult to admit that all the places of one's youth is slowly being replaced by condos that are meant to maximise profit via "cost-cutting" measures. There are hardly any historical buildings left in California- it's about demolition, building things quickly and cheaply and short-term profit in lean methodology with the erection of numerous ugly condos all over the state. It's difficult to admit that a place that has so many memories for me is a place where a wanton lack of urban planning and investment in its infrastructure may become its very demise in comparison to the cities in other nations that are actively investing in the future. However, my hope for California is that one day, major corporations won't band together to stop development of innovative transport links and will find a revenue model away from car ownership.
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In comparison, China has begun testing its Transport Elevated Bus (TEB) last month (Aug 2016) in Qinhuangdao, northern Hebei Province, an overhead bus that moves over regular traffic in response to a growing population dependent on cars.

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Softbank founder Masayoshi Son once said at a Recode Conference that he couldn't believe how people in the U.S. could live with such slow internet connection. "How can a country that is credited with the founding of the internet not be aware that they are behind the rest of world in internet connectivity?" he said. My fear is that he will then say, "How can a nation like the U.S. have such outdated modes of transportation when the rest of the world has moved onto ultra modern transport links?" at the next conference. The rest of the world is actively investing in its cities, building high tech transportation links, modernising the infrastructure of its cities, building green energy plants whilst the United States has been actively preventing innovation in much needed transport links in their cities, and singularly focused on the development of its autonomous vehicles and building "cost-cutting" residential condos and high rise towers for short-term profit. Many Brits think about moving to San Francisco to receive funding or to relocate their company, believing the grass is greener. I say to them, think again.
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By Sierra Choi

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​As a VC, not every investment is a winner, here are three that ultimately didn't make a return, and the lessons gained. Nelson Mandela said “I never lose, I either win or learn”. Unfortunately, in a bad deal, money is lost forever. Can the lessons learned be used to make it back in the future? That is the aspiration. It was an expensive education on several investments such as the ones below during the cleantech boom, then the spectacular bust which had caught many people off-guard.

Whilst investor’s money was lost on these deals – the effort to do well was absolute – we did many other great deals which left us with healthy returns overall. Hindsight is 20:20. Many funds made similar mistakes during the time of the terrible cleantech boom then the subsequent bust (I am not using this as an excuse but to show it was a systemic misunderstanding of cleantech by all investors at that time). On both sides - investors and executives - we suffered from some things we should have predicted and risks we could have mitigated and some others that just blindsided us completely.

​Solyndra – solar panel maker from the US. Took in $100’s of millions – lost it all in spectacular fashion. The bellwether company for cleantech if you ask me – a perfect example of the hysteria, bad analysis and then tragedy.

Value proposition to customer: Cheaper solar energy – a cylindrical panel of thin film solar which needed less polysilicon. 

Why the company did not reach the desired exit in the time we initially considered?
We got into this company day 1 at a high valuation we believed it warranted. We could back it up with a financial model and expert analysis (you always can! – my job was to build them – now I know better). It was all on the promise of the future based on a gross margin > 50% at enormous volume sales. Any strong tech company needs >50% gross margin. We paid a huge sum of money for technical and commercial DD from top research firms. All turned up trumps (it’s amazing how you get told what you want to hear when deal fever takes hold – always take DD with a pinch of salt – these “research firms” have no skin in the game just a sweet fee).

Then a triple whammy effect took place in the market. We should have seen some of these coming perhaps:

1. Chinese producers (who were most likely getting subsidized by their government) flooded the market with cheaper panels. 
2. Also polysilicon (the main raw material of solar panels) took a tumble in price making the competition’s product cheaper.
3. Feed in tariffs around the world for solar from Governments which had been overgenerous started to get rowed in. The market size shrank.

All this occurs as the company was getting ready to IPO and had started making significant sales however not at the efficiency of panel and thus cost per watt production needed. The IPO bankers realized they could not IPO a company on negative margins that promised 50%. They finally decided to pull it and saved a lot of money via the “light analysis” public equity investors (I used to be one - I know it!) so it was a blessing for them at least.

It created a perfect storm of headwinds:  a market size backed by government subsidies taking a hit, whilst raw materials for competitors backed by powerful Governments got cheaper and the company underperformed in production. 

Result: We lost the full investment as the company went into liquidation. Tragedy all round. The Chinese producers laughed all the way to controlling the market.

Lessons learned: A commodity industry (especially one backed by government subsidies) does not care that you have the funkiest technology – it only cares about cost. Commodity markets where you can’t differentiate are brutal. Also don’t scale while you are losing money for reasons which CANNOT be fixed by economics of scale from growth (these can be hard recognise at times however the gross margin and contribution analysis will lead you to the answer as to whether growth is your issue or something systemic is wrong).

A larger tombstone list (finally the word can be used properly) of the solar market is here.

Reactive Nanotech
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Value proposition to customer:  Reactive Nanotech had a new methodology (Nanofoil) of joining metals where high temperature was not needed and this could be applied locally thus potentially saving lot of money for semi-conductor and solar companies. 

Why the company did not reach the desired exit in the time we initially considered?
Market adoptions did not occur as we estimated (euphemistically speaking there). I can actually point back to customer calls in due diligence where a customer said “Sure, we intend to buy $1-2 million of this in the next couple of years….” Good intentions don’t cut it. More like $0. Ever since, I am wary of customer calls as a method of due diligence. As customers are in no way legally bound by these calls – not hard say they “potentially intend” to do big business. I would probably say the same in good faith to get my potential future tech supplier financed.
(TIP: Read The Mom Test - good pointers about hearing according to the quality of questions you ask in market research).

Result: We eventually sold the company not making the sought after return to an industry player who could afford more patience. After market adoption was terrible and we struggled to keep doing bridge rounds. 

Lessons learned: Market adoption especially for hardware products in markets where things have been done the same way for decades and no one is thinking it is a real problem will be slower than a kid waiting for Christmas. Fact. 

D1 Oils

Value proposition to customer: Grow an inedible crop called Jatropha in African cheaply, which (apparently) does not need much water or nutrients and would grow like crazy on a dry rock even (turns out not quite…). Supply thousands of farmers with seed to grow it alongside other cash crops and take it to a regional mill. Make Biodiesel (another commodity -  seeing a trend? ) Simple.….not quite.

Why the company did not reach the desired exit in the time we initially considered?
Another triple whammy we should have predicted at least elements of or gauged the risks better:

Execution of this business model was very difficult – getting thousands of farmers to grow an in-edible crop they were not familiar with which took (estimated) three years to mature. Easier to grow your normal food and cash crops than wait.
Jatropha yields did not come in as expected – turned out it needed a little more water and nutrients and time to mature than planned. Jatropha didn’t think growing on a dry rock was much fun.

The food for fuel argument of growing crops to run cars instead of feeding people did not help the market case - especially when it came to government backing subsidies. Whilst the oil price was high – fine but once oil starts coming down. Bad news.

Result: D1 Oils shares plunged on the AIM market from a 2005 high of 565p to stand on Sept 2011 at 1.8p. Catastrophic.

Lessons learned: First - a repeat mistake - An uneconomic biofuels market backed by Government subsidies - second time we fell for that one. 

If a business model is very complicated to execute relying on an unknown technology and thousands of different uncontrollable independent actors – it will struggle. Uber works in this environment but their technology and value proposition is sound to both sides (as of now). This value proposition of D1 Oils was totally unproven before lots of capital was spent to roll it out. ​
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Prove the value proposition beyond a reasonable doubt before rolling out not during!!! The new tech mantra of GROW GROW GROW is fatally flawed if there in one kink in a business model. The bad effect and cash drain will multiply with the growth and you will fail as it is very difficult to fix mid-stream in my experience.

Managing capital is a privileged position of great responsibility. Unfortunately bad investments happen in VC - the risk/ return model demands it. Everything will not go your way with every investment no matter how hard you try. Some mistakes in the above list could possibly have been avoided, however optimism and a lot of capital believing in a new future of cleantech world had a strong psychological grip. Cleantech has righted itself since this time and in the main, fixed the risk/ return model, the expectations and the scaling before readiness. Wisdom that is too late for the companies above but applicable in the next round of investment. 

​By John Rowland

The women stand out amongst men: Prime Minister Theresa May (2nd row, 2nd from left) and South Korean President Geun-hye Park (1st row,3rd from right) in red whilst IMF Managing Director Christine Lagarde (3rd row, 3rd from left) and German Chancellor Angela Merkel (1st row, 6th from left) in blue. World leaders met at the G20 summit in China a couple of days ago to discuss foreign and economic policy.

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The World Economic Forum published a study on Human Capital a couple of months ago that detailed each country's rank by its quality of education, integration into the workplace and retirement for elders 65+ years and older and not surprisingly, the top 5 countries were:

​1. Finland
2. Norway
3. Switzerland
4. Japan
5. Sweden

Surprisingly, the United States (no. 24) came in behind the U.K. (no. 19) and all its European, Canadian and Israeli neighbours, just ahead of the Czech Republic (no. 25). Now one might think that the U.S. has an advanced economy, the largest in the world, so why is there more illiteracy and lack of quality education in the U.S. than say in Finland, Japan or the U.K.?

It could be partly due to the fact that the U.S. is #3 in the world for having the most number of people living in poverty at 46.7 million people, just behind China (82 million people living in poverty) and India (276 million people living in poverty).

We also have to take into account that China has a population of 1.36 billion people (over 4x the population in the U.S.) in comparison to the U.S. population of 318.9 million. From 1981 to 2008, China had taken 600 million people out of poverty whereas in the U.S., after the 1990s, poverty in America exploded and nearly doubled between 2000 and 2013.
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​The alarming trend in the U.S. seems to be an increasing divide between between the different socioeconomic classes, with an ever-increasing number of people living in poverty with a dramatic shrinkage of people in the middle class.

This is the opposite trend in China, but perhaps a growing trend in U.K. The U.K. currently has 16.8% living in overall poverty primarily concentrated in Northern Ireland, Wales, Yorkshire and London at a total population of 64.1 million people.

Taking into account that many people living in poverty in the U.K. are children, it is important to target the areas that are most vulnerable (ie, Northern Ireland, Wales, Yorkshire) as areas that were previously manufacturing sectors need to transition towards their population towards more architectural, environmental engineering and agricultural sectors as part of the 4th Industrial Revolution.
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According to the World Economic Forum, architecture, design, energy and environmental engineering will become one of the foremost sectors in the 4th Industrial Revolution, as global populations are set to dramatically increase, we need to account for a new way for how people will live, consume and connect with others.
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China is developing the largest waste-to-energy plant in the world in Shenzen using nanotechnology.


​As the U.K. enters the 4th Industrial Revolution, in a post-Brexit era, it is important to consider the foreign policies of neighbours in the Far East, and develop a more grounded relationship with the pioneering nations that are leading the direction of change in the way people will be educated, live, consume and connect with others in the 4th Industrial Revolution, and these are the nations that aren't simply ignoring the poverty problem.


​By Sierra Choi