Recent coverage of Southern Cross and Castlebeck, has not only been based on material inaccuracies and misstatements of fact regarding the role played by private equity, but misses the critical role that the independent sector plays in the provision of care services in the UK. Research conducted by BUPA predicts up to 100, 000 people will be unable to access the residential care they need as a result of government spending cuts on the one hand and increasing demand from the aging population of the UK on the other, highlighting the critical need for continuing private investment into the sector to prevent overburdening an already stretched national health service.
Mark Florman, BVCA Chief Executive, stated: 'For over a decade, private equity funds have been significant and responsible investors in health and social care, providing not only necessary capital investment but also introducing modern working practices and efficiencies. With a growing need and constrained public funding, it is imperative that private sector investment continues to flow into the sector. We look forward to the publication of the Dilnot commission and working towards achieving a solution that guarantees the long-term viability of the health care sector. '
Notes to editors:
Recent media reports have contained significant inaccuracies relating to private equity's involvement in the care home sector, particularly focusing on Southern Cross and Castlebeck.
With regards to Southern Cross, Blackstone has not controlled the company for 5 years, since its IPO in July 2006. It is inaccurate to state or to imply that Blackstone created the Southern Cross lease structure, saddling the company with artificially high rents.
Whilst Castlebeck has been in private equity hands since 1998, it was sold to Lydian Capital Advisors in 2006 for £255m. Whilst referring to itself as a 'private equity investor' Lydian Capital is not structured as a private equity fund and has no independent institutional investors or a parent backer. Furthermore, it is not a member of either the BVCA or EVCA and is therefore not subject to the BVCA's Code of Conduct.
The British Private Equity and Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 450 member firms, representing the overwhelming majority of private equity and venture capital firms operating in the UK and their advisers. Since 2008 the private equity industry has voluntarily put in place robust guidelines on transparency and disclosure. The Walker Guidelines, which are independently monitored by the Guidelines Monitoring Group, chaired by Sir Mike Rake, annually monitors the industry's compliance with the Guidelines. The findings of an independent review by PwC identified that private equity-backed companies report to a consistent and in places better standard of reporting than FTSE 350 companies.
FOR FURTHER INFORMATION PLEASE CONTACT
Simon Horner, BVCA: +44 (0)20 7420 firstname.lastname@example.org