Investment in the Care-Home Sector

Blog: Part 2

by Paul Zalkin

In our recent survey, which we undertook jointly with leading trade publication, The Carer, we looked at a number of the most pressing issues for care-home owners, directors, other stakeholders and front-line staff.

We were also interested to learn whether care-home operators see opportunity for growth and plan to invest in the sector, or are looking to exit, over the next three to five years.  The survey results revealed that most are upbeat about opportunities for growth and do plan to invest.  

There is a very straightforward reason why care-home operators might be planning to invest in the sector. The population of the UK is ageing and there is therefore an increasing demand for care, which is only going to expand further.  Furthermore, the increasing demand for care means that the current, substantial funding shortfall will need to be addressed by the government. Things cannot remain as they are.    


One way to address the issue is, of course, to build more care homes – ie purpose-built, modern, regulatory-compliant care-home facilities. These are a more likely investment proposition than, for instance, properties which have been converted to care-home use. These are typically 20-bed properties or so and tend to struggle because they’re reliant on local-authority service users, paying lower weekly rates.  

However, building new care homes to meet demand is not the only option for care-home operators, investors and entrepreneurs looking to invest in the sector. There are alternative models which also provide viable opportunities for investment. For instance, one of the ways that people with ageing parents or relatives can manage their care is to create a multi-generational household. In other words, some might choose to retain wealth within the family by selling their parent’s home and their own and buying a bigger property for everyone to live in together. 

The opportunity here for entrepreneurs with care-home expertise is that they can set up agencies which support people who are able to make this choice.  It just takes some ‘out-of-the-box’ thinking. In fact, lots of different models are already emerging and any seasoned investor will see the potential of these businesses.  

There is also an increasing degree of complexity with regard to the kind of services that are required as part of caring for the elderly. It’s not just about providing residential services; there is also a growing demand for medical care, eg. services that can support residents with dementia, for instance. This is another area which could attract investors and help transform the sector.  

To sum up, it is clear that the care-home sector has many opportunities for growth and investment. As trusted corporate finance and restructuring advisers, with in-depth knowledge of the care-home sector, we continue to keep a close eye on developments.  

Paul Zalkin is a partner and licensed insolvency practitioner at leading business advisory firm Quantuma. Paul has almost 25 years’ experience of working with businesses in a wide range of business sectors helping them overcome financial and operational challenges.  During this time Paul has worked with a large number of care homes and has developed unique insight into the challenges they face.

Over the last decade Paul has developed a niche in the care home sector and is a go-to adviser for distressed care home operators and their funders.  Paul is regularly invited to speak at sector conferences and to share his thoughts with leading trade publications.