Some investors say that they are staying away from making purely tactical investments as a result of the pandemic.
"We have not made any changes due to the pandemic, but we already had decent exposure" to health care and pharmaceuticals, said Bob Jacksha, CIO of the $14.2 billion New Mexico Educational Retirement Board, Santa Fe.
"We did like those categories (health care, pharmaceuticals and logistics) before and now they do have a brighter outlook," he said in an email in response to questions.
But New Mexico Educational Retirement Board officials are not investing in health care and pharmaceuticals as part of an impact investment strategy, he said.
"The societal benefit of pharma/health care have never been a decision point for us to invest, but it is a tertiary benefit or point of pride," Mr. Jacksha said.
The government involvement under Operation Warp Speed in the development of a COVID-19 vaccine will have a lasting impact on the industry, said Brad Young, Richmond, Va.-based partner and co-CIO of private markets at Mercer.
The average time for a drug trial was sped up to a degree that had never been done before, he said.
"It will be a model for how to address future pandemics," Mr. Young said. "It will have a ripple effect on pharma and biotech and smaller startups that will be looking to address how to manage the process better and what to do with the data."
"LPs are feeling very positive about it," he added.
But not all pharmaceutical investments will be successful, said Denis Ribon, New York-based chairman and founder of health-care specialist private equity firm ArchiMed, Lyon, France.
While the pandemic has increased institutional investor interest in health care generally and in biopharma in particular, "some subsectors have been negatively impacted and will continue to suffer over the longer term," Mr. Ribon said.
"Investors need to be highly selective," he said.
For example, the pandemic's first impact on biopharmaceuticals was on the supply chain, where shortages of active pharmaceutical ingredients grew substantially, slowing the pace of manufacturing, he said.
"Shortages and slowdowns during the pandemic are accelerating repatriation of supply chain processes in both North America and Europe," Mr. Ribon said.