Eight out of ten UK pension schemes expect institutional investors to increase their exposure to social care, survey results from Downing LLP have revealed.
The pension funds identified an ageing demographic and better diagnosis of needs as the main reasons for investing in the sector.
Increasing demand for services was against a backdrop of a shortfall of suitable real estate and few high-quality management teams. The third most important reason was regulatory improvements and the development of better systems for monitoring quality.
Research company PureProfile was commissioned by Downing to interview 50 UK pension funds, which collectively manage around £102bn in assets under management.
The area expected to see the greatest increase in institutional investment over the next five years is the provision of dementia care (48%). This was followed by residential care homes for adults with physical, mental and learning difficulties (44%), then residential care homes for adults with other complex needs (42%).
Slight growth in investment over the next five years was SEND (special education needs and disability) schools for children (54%), residential care homes for adults with other complex needs (52%), the supported living accommodation for adults with physical, mental and learning disabilities (50%).
‘There is a huge need for new investment into the social care sector and with improving standards and the obvious benefits that can come from investing in this market, more professional investors are looking to increase their exposure to it,’ said Mark Gross, head of development capital at Downing LLP.
‘The level of Downing’s investment in this sector has increased and with more investors looking for greater exposure to this sector, we expect social care to remain one of our fastest growing investment areas.’
Downing’s development capital team partners with management teams to help with their growth plans. Healthcare is a subsector it focuses on, linking within the older people’s care, specialist adult care and special educational needs space.