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Capital investors increasingly interested in care services and care homes for the elderly


Capital investors increasingly interested in care services and care homes for the elderly
Capital investors increasingly interested in care services and care homes for the elderly
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In the future, will international listed companies be responsible for looking after grandma and grandpa?
      Things have moved in this direction elsewhere, but the Finns are still some way behind. All the same, things are changing fast. Companies providing services and housing for the aged are growing in size and joining forces.
      The care services branch has grown at an annual rate of some 18 per cent since the beginning of the millennium, and it is attracting the attention of new players in the market.
     
The ageing population is creating a demand for various kinds of housing and care services. Entirely new care places are needed, though the private sector is also growing as municipalities are outsourcing their existing services.
      Increasingly often the enterprises behind care services are large companies owned by capital investors.
     
The largest private companies offering care services are Medivire Hoiva, Esperi Care, Mikeva, and MedOne. They are all in the hands of capital investors interested in a sector that is seen to be growing rapidly.
      ”Previously the branch was very fragmented. However, in recent years it has been centralised to some extent, while the operations have turned into a professionally managed business”, says Marja Aarnio-Isohanni, the managing director of Esperi Care.
      Just four years ago, the turnover of Esperi was about EUR 6 million, while the budgeted total sales for 2009 are EUR 50 million, and in 2012 the company is expected to top EUR 100 million.
      The growth is partly attributable to acquisitions. Esperi has also bought some 20 smaller enterprises in the course of the last couple of years, reports Aarnio-Isohanni.
      Until a few years ago, the company was owned almost entirely by the Finnish Red Cross, but in the summer of 2006 it passed into the hands of private equity firm Unicus.
     
According to the National Research and Development Centre for Welfare and Health (STAKES), a total of 155 new private housing services units have been established for old people in Finland since 2001.
      The first pan-Nordic care services enterprise was established last summer when the Swedish firm Attendo, owned by the capital investment company Industri Kapital, bought MedOne from the funds governed by Sponsor Capital.
     
”This is a new branch of business with emerging markets, giving the owner possibilities for rapid growth”, notes Hannu Puhakka, a partner at MB Funds (MB Rahastot), the principal owner of Medivire Hoiva.
      According to Puhakka’s estimates, the private sector of care services is some 20 years behind the development of other health care. For example, a large number of private medical clinics have been merged in Finland in recent years.
     
Investment funds can offer capital for the start-up of new housing services units.
      At present large building projects are under way, while the respective companies, competing with each other, report loudly on openings of new facilities.
     
The existing shortage of labour threatening the entire health care branch also poses a challenge to the producers of housing and care services.
      The availability of skilled personnel is reported to be one of the largest risks in the branch, particularly in the Greater Helsinki area.
      Esperi, for instance, was briefly in the media for recruiting trained nurses from the Philippines to work in Finland.
     
Problems relating to the quality and oversight of nursing homes for the elderly have sparked a heated debate over the summer.
      Some interviewees believed that a large company which has more resources could invest in quality more easily.
     
”Attempts at growth and the involvement of capital investors will bring pressures to improve the quality”, believes Tuomas Land, the CEO of Intera Equity Partners, the capital investors behind Mikeva Oy, one of the largest private companies offering care services in this country.
      Intera Equity Partners bought the entire stock of Mikeva from the Ruukki Group in July, in collaboration with the Mikeva executive management.


Previously in HS International Edition:
  Filipino nurses in Finland for the long haul (29.4.2008)

Links:
  Intera Equity Partners - News
  National Research and Development Centre for Welfare and Health
  MB Funds
  Medivire Hoiva

Helsingin Sanomat


  25.8.2008 - TODAY
 Capital investors increasingly interested in care services and care homes for the elderly

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