charles adams

Chuck Adams, Citi’s global head of healthcare, consumer and retail investment banking, talks about the tectonic shifts taking place across the healthcare and consumer landscape, and how the bank is responding.

In June 2021, Citi announced its plans to launch a new “supergroup” for healthcare, consumer and wellness within its banking, capital markets and advisory (BCMA) division. According to an internal memo written by BCMA co-heads Tyler Dickson and Manolo Falco, “Healthcare, consumer and wellness will be one of [Citi’s] largest groups in BCMA and represents one of the greatest opportunities for growth.”

Citi has also brought in a big name to run it. Chuck Adams, a 16-year veteran of Goldman Sachs, where he focused on healthcare investment banking, is now leading the unit, which brings together the bank’s healthcare and consumer and retail bankers under the same umbrella.

Career history: Chuck Adams  

  • 2021 Vice-chairman, global head healthcare, consumer and retail investment banking, Citi
  • 2005 Partner, healthcare investment banking, head of west region, head of Los Angeles office, Goldman Sachs
  • 1995 Managing director, healthcare, co-head of west region healthcare banking, Morgan Stanley

“Chuck will be instrumental in driving collaboration and synergies across the new supergroup to expand our client base, transform the way we service them and drive opportunities,” said the memo. One year on, and six months since Mr Adams took the position, he firmly remains of the view that there is a great opportunity in serving a unified healthcare, wellness and consumer offering.

Major convergence

Mr Adams highlights that although the creation of a banking group focused on these industry sectors is something that has been tried by other banks in the past, for Citi the motivation is firmly around the growth and client engagement opportunity this grouping presents. “This kind of approach has been taken before, often with the idea of efficiencies or cost savings, but for Citi this has been entirely about the major convergence which is taking place between the healthcare and consumer sectors,” he says.

“We’re thinking about how these markets are developing in the long term, who might be the winners and how they might be the winners. And, if one of our clients is not quite as well positioned as they should be, we want to be as well-equipped as we can be to support them.”

Health awareness

The Covid-19 pandemic, says Mr Adams, made people “a lot more aware of their health, and tracking their health, and the idea of testing on a regular basis in order to travel, or go into the office”. Hence it has accelerated the trend of consumers being highly tuned into, and willing to spend on, their health.

Now that sentiment has arisen, Mr Adams believes it is here to stay. With it comes increased expectations. “There is often a huge frustration on the part of the consumer which has come along with that broader awareness – even predating the pandemic, with trends around wearables and other health-tracking technologies – that the traditional systems are not necessarily delivering the outcomes they want,” he says.

This consumer dissatisfaction will, he believes, lead to a period of significant “disruption and disintermediation” in order to meet demand for change.

A data explosion

These are not new tensions, but one of the biggest shifts has been the substantial increase in healthcare data and its availability to the consumer. Not only is there the consumer demand, but also in-depth data to enable new products and services to be built around those needs, even from non-traditional healthcare players.

“Technology companies are going to be the enablers of this trend. In the past year, 20% of the US population has used wearables and 40% have tracked something related to their health on their smartphone,” says Mr Adams. Already technology has revolutionised how patients with diabetes are able to monitor and manage their blood sugar levels, via sensors linked to their mobile phone or other devices. In time, similar technology could come to market to help manage other health conditions.

These developments go far beyond changes in consumer sentiment; there has been a paradigm shift in the broader operating environment, which is also feeding the megatrend. “Another thing that really changed is telemedicine, which was previously something that was kind of a novelty and has now become completely mainstream,” observes Mr Adams. He also points to changes which meant regulators had to accelerate their processes for approving vaccines, medicines and medical devices related to Covid-19, which he believes will continue to have a broader positive effect on their approaches generally.

Enhancing the knowledge base

Mr Adams is clear, however, that Citi’s supergroup structure is not about diluting the expertise of consumer bankers or healthcare bankers, but rather about enhancing the knowledge base that is readily available to bankers across the team. “We’re not integrating the consumer bankers and the healthcare bankers,” he says. “We want consumer bankers to be consumer bankers and healthcare bankers to be healthcare bankers, but we also want to make sure we’re capturing the best thinking from all of our relevant domain experts.

“Rather than a situation where we have healthcare bankers or consumers bankers, and we identify that a client sits somewhere in the middle of that expertise and put a team together that will then disband after a particular project, we’re making sure we have one team that’s always together, always thinking at this broader thematic level and always evolving that thinking.”

There’s no more sensitive data than health data. That is a problematic piece of this puzzle

The supergroup will also make use of expertise from other teams where relevant, as part of this joined-up approach. Mr Adams highlights a cross-discipline team that has been put together, which also includes two senior internet bankers from Citi’s technology team, to develop ‘best-in-class’ ideas for interesting and effective deal-making.

Ask the experts

As companies in the consumer and healthcare sectors reappraise their business models in light of the fast-evolving market conditions, being able to access broad-based, expert advice is likely to be seen as a significant asset. “A lot of the advice will be around forming the right relationships and developing the right capabilities,” says Mr Adams. “This might involve supporting our clients to partner with other companies to create an ecosystem with the right capabilities and that enables more direct communication with consumers.” He provides an example of assisting a firm to partner with a telemedicine platform in order to broaden their reach.

“I think for a lot of healthcare companies now, whether they’re in biotech or a device company, they understand that they need to be able to communicate more directly with the end patients,” he says. This trend is replicated, from a different perspective, for many consumer-facing companies who are broadening their offerings to include healthcare products. “They may start around the edges in areas like vitamins and supplements, but that offering is likely to continue to evolve into more core healthcare areas.”

Big tech deals

Given the increasingly important role of technology companies within the healthcare market, there is likely to continue to be a full pipeline of technology and healthcare crossover deals. But Mr Adams notes that we have yet to see a really groundbreaking transaction in which a large technology company, such as Amazon, Apple or Google, acquires a big-name consumer health brand. There have been some notable deals, such as Google’s acquisition of Fitbit and Amazon’s purchase of online pharmacy PillPack, but bigger transactions are still to come. 

“It feels to me that type of transaction is the next stage in the strategy, as part of the development of these major consumer and healthcare ecosystems,” Mr Adams says. “That is where the disruption and the growth will happen. It will be those companies that can create a platform that is simple to use, and will serve all of a consumer’s needs in relation to a particular therapeutic area or across their healthcare needs more broadly.”

However, there are likely to be some substantive hurdles to any major deals of this nature, which is perhaps why no such transactions have yet taken place. In the US, in particular, the Federal Trade Commission has adopted a more forthright tone around antitrust enforcement. The activities of big technology firms are squarely in the spotlight.

More broadly, regulators across the globe, such as in the EU, have been making clear their concerns about the amount of consumer data that big technology companies already possess, and how they manage and protect that data. Any deals which bring big tech into sensitive healthcare markets, and increase a technology company’s access to consumer health data, are likely to face significant scrutiny.

“There’s no more sensitive data than health data,” reflects Mr Adams. “That is a problematic piece of this puzzle.” However, he expects this will mean technology companies think creatively about how to continue their evolution in this area while avoiding some of the most contentious data issues. “There are plenty of opportunities out there in healthcare for them,” he adds.


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