Perspectives

Direct Investment Opportunities - Aged Care
10 November 2013
O'Gorman, Plehn and Day

Introduction

In March 2013 we wrote a perspective raising a concern that institutional investors were chasing too narrow a range of direct investment opportunities. In combination with a transactional mentality driven by investment banks, this was tending to drive up prices, and therefore, reduce long-term returns.

The perspective also highlighted the reality that many industries have long-term capital needs that cannot be satisfied given existing capital market structures and investor behaviours. The integration of these investor and industry perspectives leads to a broad investment idea that unique opportunities exist to shift risks from industry to investor balance sheets with favourable terms on both sides of a partnership. As experienced long-term investors, Round Tower has developed specialist advisory capabilities that bridge the existing gap between asset owners and industry.

To help illustrate our service model, we detail our emergent views on the Aged Care industry in Australia. Our research to date suggests that there exists a large imbalance between capital demand and supply within the industry and thus represents a very attractive opportunity for long-term capital. Where some investor service-providers see mismatched returns and time-frame objectives, Round Tower sees an industry with robust fundamentals well matching the requirements of long-run investors. Please contact us if you would like a copy of this Perspective.



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