Based in Miami with offices in Paris and Madrid, SPHERE (Strategic Public Health Equities and Real Estate) is a pioneering force at the intersection of public health equities and real estate investment. With a goal of improving global public health, SPHERE represents an evolutionary approach that goes beyond traditional healthcare infrastructure, reimagining the built environment to improve communities’ well-being. Pulse 2.0 interviewed Sphere Investments founder, president, and CEO Didier Choukroun to learn more about the firm.
Didier Choukroun’s Background
What is Didier Choukroun’s background? Choukroun said:
“As the Founder, President & CEO of SPHERE Investments (formerly Flagler Healthcare Investments), my journey has been shaped by a diverse set of experiences across real estate, finance, urban planning, and public health.”
“After completing my undergraduate and graduate studies in finance at L’Institut Supérieur de Gestion in Paris, France, I began my career in real estate development, working for firms like Club Med in Brazil and Bouygues Immobilier in Spain. This sparked my passion for creating built environments that enhance people’s lives. I then obtained a Master of Business Administration from Northwestern’s Kellogg School of Management and a Research Fellowship in Urban Planning and Architecture from the University of Miami. These educational experiences deepened my understanding of the interplay between the built environment, business strategy, and community well-being. My most recent academic pursuit was a Master of Public Health from Yale University, which provided me with a comprehensive lens to view health holistically – recognizing how factors like housing, nutrition, environment, and access to care all shape public health outcomes.”
“This multidisciplinary background ultimately culminated in the founding of Flagler Healthcare Investments in 2010. Drawing upon my expertise in real estate, business, urban design, and public health, I sought to reimagine healthcare infrastructure to place patients at the center while fostering healthy, sustainable communities.”
“Since 2010, our company has grown into a prominent healthcare real estate leader. We own and manage medical office buildings, outpatient surgery centers, and specialized and long-term acute care hospitals across 15 U.S. states, with a portfolio valuation exceeding $1 billion. In February 2024, Flagler Healthcare Investments rebranded and repositioned as SPHERE (Strategic Public Health Equities and Real Estate), broadening its mission beyond traditional healthcare infrastructure by combining real estate investments with equity stakes in companies driving innovation in areas that impact public health.”
“Under the SPHERE brand, the company has a dual objective:
— Expanding its real estate investments into areas like senior living facilities, workforce and student housing, research labs, and community health assets.
— Engaging in strategic equity participation in companies, operations, and technologies across sectors like food and agriculture, transportation, environmental sustainability, healthcare, and life sciences.”
Evolution Of Sphere Investments’ Thesis
How has your firm’s thesis evolved over time? Choukroun noted:
“SPHERE Investments has undergone a significant evolution in its investment thesis since its inception. Initially, the company’s focus was on healthcare real estate, with the mission to provide better outcomes and experiences for patients. This approach allowed SPHERE to build a robust portfolio, spanning a diverse range of investments in healthcare properties made to improve clinical outcomes and patient experiences.”
“Starting in 2024, the evolved investment thesis encompasses a broader scope, extending beyond healthcare facilities to encompass the entire built environment that contributes to public health. This includes investments in senior living facilities, workforce and student housing, research and innovation labs, and community health and sustainability assets.”
“Some key points regarding SPHERE’s evolved investment thesis:
— The company’s mission has expanded from healthcare-focused investments to a impacting public health, serving as a vanguard of a larger movement where health-focused real estate and private equity are no longer just about building and returns.
— SPHERE’s evolved investment thesis is centered around two main objectives: reshaping the built environment and fostering healthy, sustainable, and thriving communities.
— The evolved investment thesis reflects a deep understanding of how social determinants of health fundamentally shape health outcomes.
Favorite Memory
What has been Choukroun’s favorite memory working for the firm so far? Choukroun reflected:
“One of my favorite memories working for SPHERE Investments was the acquisition of Prime Healthcare Analytics from Konica Minolta in 2014.”
“The acquisition of Prime Healthcare Analytics, a cloud-based healthcare market intelligence application, gave us access to advanced algorithms, multiple data sources, and terabytes of claims, clinical, socioeconomic, psychographic, and medical real estate data. This enabled us to become the unique data-driven enterprise we are today and develop robust analytic models for predicting healthcare needs and optimizing investment outcomes.”
“This acquisition allowed us to build a competitive advantage through analytics that provides a deeply informed and holistic understanding of the forces driving healthcare real estate investments. It was the point of departure that empowered us to integrate siloed information, uncover previously invisible insights, and significantly improve our operations, strategy, and performance.”
Significant Milestones
What have been some of Choukroun’s most significant milestones so far? Choukroun cited:
“SPHERE Investments has achieved several significant milestones that have shaped its growth and strategic direction over the years. Here are some of the key milestones:
— 2011: Acquisition of Bethesda Health City: One of our earliest milestones was the acquisition of Bethesda Health City, the largest medical mall in the State of Florida.
— 2014: Acquisition of Prime Healthcare Analytics: In 2014, we acquired Prime Healthcare Analytics from Konica Minolta. This data-driven approach has been a cornerstone of our strategy ever since.
— 2018: Formation of FIH Joint Venture with Fosun: In 2018, we formed a platform joint venture with the Chinese conglomerate Fosun. This partnership enabled us to leverage Fosun’s extensive resources and expertise, further expanding our capabilities in healthcare real estate investment and development.
— 2019: Launch of Healthcare Funds with Leste: In 2019, we partnered with Leste, one of Brazil’s premier asset management companies, to launch the first of three healthcare funds. This collaboration allowed us to pool resources and expertise, creating a series of direct healthcare real estate investment vehicles that have significantly contributed to our growth.
— 2020: Formation of Flagler TREA Venture with Nuveen: In 2020, we formed the Flagler TREA Venture with Nuveen. This venture further diversified our investment portfolio and strengthened our position in the US healthcare real estate market.
— 2021: Reaching $1 Billion in AUM: By 2021, our assets under management (AUM) reached $1 billion, with properties spanning 15 U.S. states. This milestone underscored our growth and success in building a high-quality portfolio of healthcare real estate assets.
— 2023: Expansion into Europe: In 2023, we expanded our operations into Europe, opening offices in Paris and Madrid. This international expansion allowed us to tap into new markets and opportunities, further solidifying our global presence.
— 2024: Rebranding as SPHERE Investments: In February 2024, we rebranded and repositioned as SPHERE (Strategic Public Health Equities and Real Estate) Investments. This rebranding reflected our evolved mission to impact public health through strategic investments in the built environment and innovative operations and technologies.”
Assets Under Management
When asking Choukroun about the firm’s assets under management (AUM) and any other notable metrics, he highlighted:
— SPHERE reached $1 billion in AUM in 2021, with properties spanning across 15 U.S. states.
— In the next 3 years, SPHERE plans to invest approximately $1 billion in equity through the acquisition of “public health” real estate assets in the U.S. and Europe.
— SPHERE also demonstrated the ability to generate strong returns, distributing annual cash-on-cash returns averaging 9.8% since 2011, and achieving internal rate of returns (IRR) above 24% on average on realized investments since 2011.
These metrics demonstrate SPHERE’s ability to generate outsized returns for its investors while pursuing its public health-focused investment strategy.
Challenges Faced
What challenges have Choukroun and the team faced in building the company? Choukroun acknowledged:
“Despite the firm’s impressive achievements in becoming a leading healthcare real estate investment firm within a decade, there were signs that success had bred complacency. The pace of innovation had slowed dramatically, and this nonchalant attitude risked morphing into widespread partner and employee disengagement.”
“To overcome this obstacle, I worked on creating an organizational environment that fosters employee development and growth by moving away from the traditional hierarchical leadership paradigm towards a more collaborative ‘stewardship model’ that values sharing collective intelligence across all levels of the organization. This led me to implement a ‘Corporate Restructuring Plan’ in November 2022. which aimed to progressively transform SPHERE into a decentralized, self-managed structure where control and hierarchy are replaced by distributed authority and collective intelligence. Some key features included:
— Abolishing rigid hierarchies and centralized decision-making processes.
— Retiring practices like annual budgets, strategic planning cycles, and mid-term reviews.
— Fostering a more fluid and organic management approach.
After two years into the restructuring, the firm has regained its dynamism with an explosion of new initiatives. The SPHERE transformation has provided us with an exciting future and a group of collaborators more united and driven than ever. This comprehensive cultural shift has empowered employees at all levels to be autonomous, take ownership, and harness their collective intelligence for continuous improvement and innovation.”
Future Goals
What are some of your firm’s future goals? Choukroun pointed out:
“Our main goals for the firm in the short term are:
— Expand our investments into the senior living sector, as well as workforce and student housing projects affiliated with major health systems. This aligns with our evolved mission of reshaping the built environment to impact public health.
— Accelerate our growth in the European market through a strategic partnership with one of the leading European investment management platforms.
— Diversify our sources of capital, through the creation of new funding models and frameworks to directly reach and raise funds from pension funds and public investors, in addition to our existing institutional investor base.
— Expand our investment portfolio in innovative companies, operations, and technologies across sectors like food, agriculture, transportation, environmental sustainability, and healthcare/life sciences.”
Additional Thoughts
Any other topics you would like to discuss? Choukroun concluded:
“At SPHERE Investments, the spirit of continuous learning and improvement is embedded in our cultural DNA. We believe that ‘the only way to stay ahead is by continuously learning.’ This commitment to growth and development drives us to constantly seek new knowledge and innovative solutions. As Albert Einstein wisely said, ‘Intellectual growth should commence at birth and cease only at death.’ By fostering a culture where every team member is encouraged to learn, innovate, and share ideas, we ensure that our organization remains dynamic and forward-thinking. This relentless pursuit of knowledge not only enhances our professional capabilities but also unites us in our mission to create healthier, more sustainable communities.”
