Investors defend private equity following Four Seasons administration


Investors defended the role of private equity investment in social care at the LaingBuisson Social Care Conference in London yesterday.

The remarks by the panel of investors came following Four Seasons’ announcement at the end of April that it had put its two holding companies into administration (see BREAKING NEWS: Administrators appointed at Four Seasons’ holding companies).

When asked by CHP whether the situation at Four Seasons called into question the role of private equity in social care, David Dahan, Senior Advisor, Life Health Capital, said: “I don’t think it [Four Seasons] puts it into question because private equity capital is going to be needed.”

Sam Gray, Partner at Apposite Capital, noted that the Four Seasons situation had generated bad press for private equity investors but added: “What we need to be worried about is are people still people being given quality care and are commissioners putting all their eggs in one basket?”

Clare Connell, Managing Director of Connell Consulting, said Four Seasons’ administration was the result of “mismanagement”.

Speaking later during the event, Dr Chai Patel, Chair of HC-One, which is also owned by private equity, said the administration was just a “contractual legal system” to protect Four Seasons’ operational business.

“Hopefully there will be a swift resolution to this situation,” Dr Patel added.

“The bondholders have been extremely good about putting capital into the operating company and ensuring that they are being properly looked after while the financial structures are sitting in administration, but this is too complicated for our media to try and say so they just do the ‘shock, horror’ bit and upset the people in the homes where really they don’t need to worry and the staff don’t need to worry.”

Image copyright: LaingBuisson

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