Gresham House makes its first major investment in healthcare provision by acquiring elderly care provider New Century Care, as part of its sustainable infrastructure strategy
Specialist alternative asset manager Gresham House has made its first major investment in healthcare provision with the £21m acquisition of New Century Care (NCC), an elderly care provider operating care homes across the UK, as part of their sustainable infrastructure strategy.
In terms of how the investment fits into the firm’s overall strategy, Ruth Murray, associate director, sustainable infrastructure, tells Impact Investor: “We have six main priority areas across the business – digital inclusion, decarbonisation, regeneration, waste solutions, resource efficiency, and finally health and education.”
Up until this points, she explains, the team has invested across all of the other sectors, but this is the “first major investment we have made in health and education. It was the last of our thematic areas to invest in because frankly it’s quite tricky to find the right kind of impact”.
She adds: “We didn’t want to be scared away by the scale of the challenge here. We very much wanted to get into elderly care, but recognised the difficulties faced by operators in the past. We chose a responsible and considered approach entering with a high-quality operator.”
The investment was made in partnership with specialist care and education provider Salutem who “will ensure these investments deliver positive and responsible social impact”.
Sharan Soni, investment manager, sustainable infrastructure at Gresham House, adds: “Our main reason for making this investment is because we believe it is an area where we can have real impact. With 1.4 million older people in the UK without access to sufficient care, residential healthcare urgently needs public and private investment to expand capacity and enhance care.”
In the past five years there has been only a 0.9% increase in social care capacity in the UK, while the population aged 85+ has grown by 9.1%. By 204, it is expected that there will be over 3 million people aged 85 or over – more than double today’s number.
Soni continues: “The portfolio we are taking over is a well sized anchor point for entering the space and there is material upside from introducing a high-grade operator. I believe we will get a strong financial return from this investment that fits in with our existing return targets.”
GH expects to grow the combined portfolio both organically and through strategic acquisitions over the next few years. Future plans are to raise the quality of care including providing specialist dementia care.
Soni concludes: “This is an anchor investment to build out an elderly care platform focused on delivering improved quality of care and serving a higher acuity of needs.”