Sunday, February 12, 2017

Profit from the elderly

We are all getting older and we will be older for longer. In 20 years time, there will be 1.3 million old age pensioners in the Irish Republic, almost twice the number today. Ireland's ageing population has presented investors with a lucrative money-making opportunity. It's a simple case of supply and demand: there are not enough nursing home beds to cater for the huge numbers of elderly people who will need long-stay residential care.  Dublin's biggest professional advisers such as Arthur Cox and BDO are promoting nursing homes to their clients as a lucrative investment. Now 76pc of all nursing home residents are in privately owned facilities. In 20 years time, the likelihood is that long-stay elderly care in Ireland will be more or less privatised, in the hands of commercial operators.

 Ireland is depending on commercial operators to provide nursing home beds for the ageing population. The future demand for beds has spawned a new breed of entrepreneur and amongst them are overseas investors hoping to buy in for a slice of the future profits. Figures show that 10 Irish nursing home operators shared fees of €53.2m last year paid by the Health Service Executive under the Government's Fair Deal scheme. That is €13m more than the top 10 nursing home operators collected four years ago. Their owners range from motoring millionaires to publicans to husband and wife teams who developed small care home businesses into multi-million euro enterprises.

Investors in the nursing home sector include a former chair of the Economic and Social Research Institute, Joseph Harford, a key figure in the pharmaceutical industry in Ireland and abroad with a string of awards and board positions to his name. He is one of six investors in the high-tech Tara Winthrop nursing home in Swords. Another investor who has come to nursing homes form a different path is Oisin O'Buachalla.  He dominated the car leasing business with his wife Sharon. Eileen and Anthony Gallagher who opened Ryevale Nursing Home in Leixlip, Kildare, in 1985 with 13 beds - it is now one of the highest paid under the Fair Deal scheme at €5.14m. According to the abridged accounts, the company had shareholders' funds of €9.4m in 2015. Many nursing homes don't publish accounts because they are unlimited entities, and not required to. Others have structured shareholdings in the business in companies registered in offshore havens such as the Isle of Man or in the British Virgin Islands. Dan Pena, a businessman and high performance coach who claims to have generated €50bn in his lifetime, is chairman of Seneca, an Irish outfit that is actively looking for nursing homes to buy into.

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