Private equity exploitation in elderly care homes

What happened: Avery Healthcare, a private equity-backed care home operator, has been charging fees for 14 days post-resident death and an upfront £595 "dilapidations" fee. Meanwhile, private firms providing services to the NHS have made £1.6bn in profits over two years, with contracts worth £12bn. Families have reported difficulties retrieving fee balances from cash-strapped care homes.

Market impact: The narrative highlights potential exploitation in the elderly care sector, with private equity firms profiting from vulnerable residents. This could lead to regulatory scrutiny, impacting valuations of private equity firms and care home operators. NHS spending on private services may face increased public and political pressure.

What to watch next: Avery Healthcare's earnings release on 31 July 2023, to assess fee structures and profit margins. The Competition and Markets Authority's (CMA) ongoing review of the care home sector, due to conclude in late 2023, will provide insights into potential regulatory changes.