INTERNATIONAL MEDICAL SCHOOLS HAVE A BAD REPUTATION. THAT NEEDS TO CHANGE, FOR THE GOOD OF U.S. PATIENTS.

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It’s growing ever more difficult to become a doctor. Last year, U.S. medical schools attracted more than 51,000 applications. But only about 21,000 students matriculated.

Scores of Americans who would make great doctors never even get the chance to start their medical education.

Some decide to pursue their dreams outside the United States, at international medical schools.

Doctors trained abroad are crucial in America — they account for more than a  quarter of our physician workforce.

Yet international medical schools, and those in the Caribbean in particular, have an uneven reputation.

For instance, some international schools have a reputation for being unable to place their graduates into U.S. residency programs. Their alumni may return to the United States with significant student debt and uncertain career opportunities.

The quality of international medical schools does indeed vary widely. But that’s equally true of schools in the in the United States. And the data show that the best international schools are on par with top American programs.

Given America’s looming doctor shortage, we can’t afford to undervalue graduates of international medical schools.

At first glance, U.S. med schools seem to do a better job preparing their graduates for careers in medicine. Ninety-six percent of students from U.S. or Canadian medical schools passed the U.S. Medical Licensing Examination on the first try in 2016. Just 78 percent of students from schools outside the United States or Canada did so on their first go-round.

But the data from specific international schools tell a different story. In 2015, 97 percent of students at the University of Queensland’s Ochsner Clinical School in Australia passed step 1 of the exam on the first try.  At my school, St. George’s University in Grenada, 96 percent passed in 2016.

The figures on residencies for international students look scary, too. In 2016, 94 percent of U.S. students matched for residencies. Just over half of students trained internationally did.

But again, there was wide variation among international schools. Some posted numbers on par with their U.S.-based counterparts. This year, all of the graduates of Ben-Gurion University’s medical school in Israel who entered the U.S. National Resident Matching Program secured residencies.  Last year, 93 percent of American graduates of St. George’s who applied for residencies in the United States got them.

In some ways, these international medical schools’ stats are even more impressive because their students typically enter with lower grades or MCAT scores than their U.S.-educated peers. Many students attend international schools only because they were turned down stateside.

So international medical schools tend to invest in support services that help students succeed academically and personally. The School of Medicine at University College Cork in Ireland, for example, assigns each international student a senior faculty mentor to provide advice and support.

Research has also shown that international medical graduates deliver high-quality care — in some cases, higher-quality care than doctors educated in the States. One recent study found that Medicare patients admitted to a hospital were less likely to die within 30 days if treated by an internationally trained doctor rather than one educated in the United States.

Finally, international medical graduates tend to practice in locales and disciplines where the need is greatest. For example, in areas where per capita income is below $15,000 per year, international graduates account for 42 percent of doctors.

Or take primary care. By 2030, the United States could be short 43,000 primary care physicians. International medical graduates will be the ones who fill that shortage.

More than half of medical students educated in the Caribbean choose primary care, compared to one-third of U.S.-educated students. At some international schools, that share is even higher — about three-quarters of grads from St. George’s and almost 60 percent from the American University of the Caribbean head into primary care.

In other words, Caribbean medical schools are doing a better job addressing America’s doctor shortage than their counterparts in the States.

The region’s best medical schools provide the personalized training and support needed to turn promising students into top-notch physicians. And American patients benefit immensely.

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G. RICHARD OLDS, THE WASHINGTON POST

G. Richard Olds, M.D., is president of St. George’s University. He was founding dean of the medical school at the University of California at Riverside.

Altas Partners, a pioneer of long-life private equity investing, agreed to buy the largest educator of physical-therapy professionals in the United States.

The Toronto investor on Wednesday announced it will pay US$400 million to acquire the University of St. Augustine for Health Sciences, an academic institution that provides graduate health-science degree programs, primarily in the field of physical and occupational therapy.

The 39-year-old school, which offers classroom and distance training opportunities, has campuses in San Marcos, California, St. Augustine and Miami, Florida, and Austin, Texas.

The deal, expected to close in the fourth quarter, will transfer ownership of USAHS to Altas from Laureate Education, a global network of post-secondary institutions. Laureate acquired a majority interest in 2013.

USAHS appears to be right in the wheelhouse of Altas, which was founded in 2012 by Managing Partner Andrew Sheiner, formerly a senior Onex Corp executive, to make control-stake investments in hard-to-replicate businesses and hold them indefinitely.

The institution’s reputation is partly based on student outcomes. Students attending USAHS had a three-year average graduation rate of 92 percent over 2015-2017, while available data point to recent post-graduation employment rates approaching 100 percent.

Conway, Altas’ point man on the USAHS deal, said the plan is to support the school’s management team, led by CEO Vivian Sanchez, and its strategy. He declined to share additional details.

Altas was created by Sheiner to invest up to $600 million in one to two deals per year. It invests selectively, with a horizon that goes well beyond the PE industry average of three to seven years. The goal is to own assets flexibly and long enough to generate maximum value.

Altas declined comment.

Sheiner expects USAHS to perform just as strongly with the investor’s help. “When you have the good fortune to own an institution like this, the largest physical therapy school in the United States, our orientation is to build it slowly and thoughtfully over a long period of time,” he said.

Macquarie Capital provided financial advice to Laureate in the USAHS deal, while Drinker Biddle & Reath was the legal adviser. Kirkland & Ellis advised Altas on legal matters.

USAHS is the third investment of Altas Partners Holdings LP, which raised US$1 billion in 2016. It was preceded by Capital Vision Services, a manager of optometry practices bought in 2015 by a group led by Altas and Caisse de dépôt et placement du Québec, and PADI, a scuba diving trainer backed last year.

The firm’s other investments are medical school St. George’s University and salt provider NSC Minerals. Altas capitalized those deals with institutional partners.

Sheiner today leads a team of a dozen investment professionals, including Partners Christopher McElhone, Paul Nicoletti and Scott Werry. Conway joined Altas two years ago from Mill Road Capital.

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KIRK FALCONER, PE HUB

Altas Partners has acquired a significant convertible preferred equity interest in PADI (Professional Association of Diving Instructors), the largest scuba diving membership and diving certification organization in the world.

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Founded in 1966, PADI is an iconic brand that has set the industry standard for scuba instructor training. PADI enjoys a leading market position globally, with more than 25 million PADI certified individuals worldwide. The Company’s members include more than 6300 dive shops and resorts and 130 000 individual PADI instructors who award close to one million consumer diver certifications each year.

Headquartered in Rancho Santa Margarita, CA, with regional offices in Canada, UK, China, Japan and Australia, PADI supports the efforts of individual professional members and dive centers and resorts in more than 183 countries. The PADI system of diver education is based on progressive training that introduces safety skills, safety-related information and local environmental knowledge to student divers in stages. PADI courses are student-centered and provide maximum practice and realistic application. For more information, please visit www.padi.com.

Altas Partners is delighted to welcome David Lawee to the firm’s Advisory Board. David has a deep appreciation for how technologies can enable businesses, and transform industries, stemming from his experience as both an investor and a leader over many years at Google and CapitalG. David will bring valuable insight and a differentiated perspective to Altas and our businesses. David joins Yves de Balmann, Tony Bowe, John Francis, Andrew Hauptman, Joe Natale and Katie Taylor as advisors to the firm.

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ABOUT MR. LAWEE

David Lawee is a Partner at CapitalG. Previously, David was Google’s Vice President of Corporate Development, managing the company’s acquisitions and investments. Over David’s five-year tenure Google acquired approximately 100 companies. Before that, as Google’s first Vice President of Marketing, David managed all of Google’s consumer, advertiser and partner marketing, globally.

Before joining Google, David was a founder of Xfire, a leading online gaming community, which was acquired by Viacom. Previously, David co-founded three other start-ups including Mosaic Venture Partners, a leading Toronto-based venture capital firm. He also worked as a management consultant at McKinsey & Company.

David holds degrees in law and philosophy from McGill University and the University of Western Ontario respectively, as well as an MBA from the University of Chicago.

Altas Partners is delighted to welcome Joe Natale to the firm’s Advisory Board.

Joe brings tremendous executive, leadership and broad-based technology experience to the Advisory Board. He joins Yves de Balmann, Tony Bowe, John Francis, Andrew Hauptman and Katie Taylor on the Advisory Board.

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ABOUT MR. NATALE

Joe Natale is the former President and Chief Executive Officer of Telus Corporation. During his 12-year tenure at Telus, he held positions of increasing responsibility, helping build a national communications company that is recognized globally for its financial and operating performance, customer loyalty, team member engagement and corporate social responsibility.

Prior to Telus, Joe held senior leadership roles at KPMG Consulting, including Global Managing Director in consumer and industrial markets, Country Leader for Canada and Managing Partner for Business Transformation Services. Joe joined KPMG Consulting after the company he founded, PNO Management Consultants Inc., was acquired by KPMG in 1997. He began his career at Accenture in 1987 in strategy and transformation services.

Joe currently serves as Vice Chair of the Board of Directors of Celestica. He is a member of the Board of Soulpepper Theatre Company and the Board of Trustees of Toronto’s Hospital for Sick Children. He sits on the University of Waterloo, Dean of Engineering Advisory Council. Joe and his wife Melissa are active members of the community, supporting initiatives in healthcare and the arts.

Joe is a past recipient of Canada’s Top 40 Under 40 Award and holds a Bachelor of Applied Science degree in Electrical Engineering from the University of Waterloo.

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ABOUT ALTAS

Altas Partners is an investment firm with a long-term orientation focused on acquiring significant interests in high-quality, market-leading businesses in partnership with outstanding management teams. Key elements of our approach include prudent capital structures, active ownership through strategic and operational support and an emphasis on sustainable value creation. We strive to deliver outstanding investment returns for our investing partners. Altas was founded as a collaborative partnership and is led by seasoned private equity professionals and experienced operating executives.

WARREN BUFFETT’S Berkshire Hathaway is celebrated for identifying undervalued companies, buying them, holding on to them for years and reaping handsome rewards for its shareholders. Private-equity firms, by contrast, habitually deal in shorter timespans. Funds with a typical life of ten years aim to turn round troubled companies and sell them profitably within just three to five years. Recently, though, the private-equity industry has taken a page from Mr Buffett’s playbook.

Several buy-out firms have been setting up funds that intend to lock up investor funds for 20 years and to hold individual companies for at least ten. Their target net annual return of 10-12% is well below the 20% usually aimed for by ten-year funds, but they promise less volatility and lower fees—1% or so, rather than the customary 2%. Among the largest private-equity firms, Blackstone, the Carlyle Group and CVC have all set up dedicated long-term funds. The largest, Blackstone’s, has raised nearly $5 billion. Specialised upstarts such as Altas Partners of Toronto, which raised $1 billion for its first fund in the spring, are also getting in on the act.

Private-equity houses are establishing these funds mainly because their clients have an appetite for them. With interest rates at rock-bottom, investors are keen to find assets that can offer decent returns. Sovereign-wealth funds, which can invest for indefinite periods, are happy to accept long-term funds’ illiquidity. Endowments, too, are locking up money for longer.

Creating long-term funds is not simple. Ludovic Phalippou, from Said Business School at Oxford University, says that getting fee and incentive structures right can be “very tricky”. Fees, typically fixed for the life of a fund, may look reasonable at first but prove wrong later. Low fees may lure investors but give private-equity firms insufficient incentives to manage the investments diligently; high fees could allow firms to siphon off most of investors’ returns. In quick turnarounds, new managers are usually brought in with the promise of juicy bonuses linked to the sale; how, Mr Phalippou asks, could that be done with a 20-year horizon?

Some have concerns about conflicts of interest. One worried investor fears that large private-equity firms might earmark promising companies for their short-term funds—which remain their core business—leaving only mediocre ones for the new long-term funds.

Small, long-term specialists like Altas Partners should avoid that pitfall. Andrew Sheiner, Altas’s founder, says he intends to hold on to investments for up to 15 years, but to retain the flexibility to “own each business for as long as it makes sense”, so some may be sold sooner. Altas says it has attracted a lot of interest not only from investors but also from the owners and bosses of target companies, many of whom are tired, in Mr Sheiner’s estimation, of being handed from one private-equity owner to another, and instead seek a more stable, longer-term partner.

Despite their recent surge, longer-dated private-equity funds are likely to remain a niche. Last year investors committed $384 billion to the whole industry; the amount going into long-term funds is a small fraction of that. Only 5% of funds set up in 2016 have an intended lifespan longer than 12 years, according to Preqin, a data provider. The large, sophisticated investors who would be the best fit for such long-term funds can often build internal private-equity teams more cheaply. For others keen to invest in a portfolio of companies for the long term, there is another option. If even Henry Kravis, co-founder of KKR, a buy-out behemoth, has called Mr Buffett’s method “the perfect private equity model”, might it not make sense to invest directly in Berkshire Hathaway?

Altas Partners is pleased to announce that Damon Conway has joined the Firm as a Principal.

Prior to joining Altas, Damon worked at Mill Road Capital in Greenwich, Connecticut where he focused on private equity and public equity investments, and at Onex Corporation in Toronto, where he was actively involved with the acquisition and subsequent ownership of Husky Injection Molding Systems. Damon began his career in the Mergers & Acquisitions group at CIBC World Markets. Damon earned a Bachelor of Commerce degree with First Class Honours from Queen’s University and a Master of Business Administration degree with Distinction from Harvard Business School.

HIGHLIGHTS STRONG SUPPORT FOR ITS DIFFERENTIATED APPROACH TO PRIVATE EQUITY INVESTING

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Altas Partners LP, a North American private equity firm, announced today that it has completed a US$1 billion fundraise for Altas Partners Holdings LP. The fund closed at its hard cap and was oversubscribed.

Altas was established in 2012 to pursue a differentiated approach to private equity investing.  The firm seeks to invest in only one or two businesses each year, and has a longer-term outlook than many private equity firms.  The firm’s partners believe that this orientation allows Altas to make strategic and capital decisions that support attractive growth in value over time, and that its flexible time horizon, with the ability to own each business for more than ten years, provides a meaningful benefit to its investors and is greatly valued by the CEOs and executives that lead Altas’ operating companies. Altas and its partners have made three acquisitions since the firm’s establishment: NSC Minerals, St. George’s University, and Capital Vision Services.

“We are very grateful for the support we have received from the outset of the fundraising process,” said Andrew Sheiner, who founded Altas following a 17-year career with Onex Corporation.  “This capital will allow us to continue the process of building our portfolio carefully in the coming years, working with exceptional management teams and on behalf of like-minded investors.”

ALTAS DOUBLES DOWN ON LONG-TERM VISION WITH $1-BILLION FUNDRAISING

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Patience is proving to be a real virtue for private-equity firm Altas Partners LP, which raised $1-billion (U.S.) for its new fund.
The Toronto-based firm, founded by Onex veteran Andrew Sheiner in 2012, is effectively doubling its size with this latest fundraising. Altas now manages about $2-billion that it uses to invest in businesses over an uncommonly long horizon of up to 17 years.

That holding period is Mr. Sheiner’s way of spending more time thinking about owning businesses, rather than focusing on when and how to sell them. He said some funds with plans for shorter ownership stints have been “chasing their tails from the outset” in recent years.
Altas also wants to set itself apart from the swelling group of about 400 private equity firms in North America that manage more than $500-million in capital .

“It’s intensely competitive, but there are not a lot of firms that have a longer-term orientation. It is still truly a handful,” said Mr. Sheiner. The fund was oversubscribed in this latest round, exceeding fundraising goals to hit its $1-billion cap.

Altas limits itself to just one or two major purchases a year. It also likes to keep debt levels lower than average to ensure its businesses can weather downturns. The firm targets equity investments of about $150-million to $600-million, partnering with other institutional investors on larger deals. That means the $1-billion it has raised will be good for three or four deals, Mr. Sheiner said.

Even outside of Altas, average holding periods for private-equity investments edged up in recent years as some firms needed extra time to clean up after the crisis, and others were forced to wait longer for acceptable returns on assets bought at high multiples post-crisis.

That began to reverse last year as high asset valuations encouraged more PE funds to head toward the exit and clear out their inventory of older assets. Median holding periods for investments owned by private-equity firms dropped to 4.9 years in 2015, from 5.8 a year earlier, according to a report from private-equity giant Bain & Co.

Altas is looking to invest in businesses that will be important and relevant in another decade. “It’s actually a very tough filter,” Mr. Sheiner said. Investing in media or technology is typically off the table.

The first $1-billion was primarily spread between three investments. First was NSC Minerals, provider of salt for de-icing roads and for agricultural applications. Then came a hub for international medical students with the purchase of St. George’s University in Grenada. Most recently, the firm bought Virginia-based Capital Vision Services, which provides support services to independent optometrists under the brand name MyEyeDr. These deals were done with partners, including institutional investors such as pension funds.

With those transactions successfully closed, Altas set out to raise more committed capital about a year ago, bringing in a mix of existing and new investors to back its strategy of owning businesses over the longer term, typically for at least 10 years. The firm will participate in auctions under some circumstances, but prefers to go after opportunities where it can build relationships with owners and management teams looking for particular solutions.

In the case of Capital Vision, the business was owned by another private-equity firm that was looking to exit. The company’s founder wanted to buy the business alongside a partner that could stick around, Mr. Sheiner said.

The next step for Altas will be to staff up – by the end of the year Mr. Sheiner plans to add three investment professionals to the team of eight already in Toronto.

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JACQUELINE NELSON, THE GLOBE AND MAIL