Breakfast Seminar

“Diversification is key,” said Ventas Inc Senior Investment Officer Carrie Hiebeler, explaining why her organisation had added the UK to its extensive investment activity in the US and Canada.

Her organisation owned six major US medical office buildings, as well as care homes and hospitals, she told delegates, but it was the UK’s similarities that made the country attractive. “We speak the same language, and it’s not that far away.” However, there were always challenges attached to international investment, she said, including tax, currency, culture and structure – such as leases. “It’s a bit of a learning curve. You’d like to bring your US methods of operation, but you can’t always do that.” The American healthcare situation was also in a state of flux, she said. “We’re getting there. But the NHS is a behemoth. We don’t have that in the states.”

Mainland Europe was now also on the radar, she told the seminar. “But then you also get into the language issues, and every country’s different in terms of tax. But at the end of the day we have to create value for our shareholders.”

There were other emerging UK challenges, however, she stressed. “There are some headwinds we’ve all seen in the press, such as the living wage and so on. It comes down to finding better operators and becoming smarter investors, so we can continue to invest and grow.”

The social care market was one where “it’s not just about taking care of people, but managing a business”, she said, “which means that finding the right management team is key. So we spend a lot of time evaluating and understanding operators.” On the subject of what happens when faced with a failing operator, it was a situation that “hopefully we won’t face”, she said. “But hopefully we’ll also be able to foresee any situations – we get monthly reports so we’re in constant communication with our operators. It’s a partnership. And in a worse case scenario you can restructure the lease and rents.”

Competition, however, was a good thing, she stressed. “Having a different profile of competitors – private equity, insurance companies, pension companies – is healthy. There are always good ways to partner with them.”

One emerging challenge facing organisations in both the UK and the US was the growing shortage of nursing staff, with many nurses leaving the UK to work in America. “So we both need to figure out a way to get more nurses,” she said.

Ventas intended to put down deep roots in the UK, however, she stressed. “You have to have a long-term investment thesis. You have to just hold on – that’s the nature of growing the business to a global platform. So we’re here for the long-term. You might have national differences, and we all spend different proportions of GDP, but healthcare is universal. Every country shares that need to take care of people, and to do it efficiently.”

Much has been discussed about the future of large general hospitals, and whether they were really compatible with 21st century healthcare systems, but “we’ll always have the big box where you go to have the big procedures done”, she stated. “In the US, the model is put your medical office buildings around that – there’s always going to be acute care hospitals, even if there are specialists outside of it.

“The big box is the most expensive, so the aim is to get people out of it into the smaller box. But acute care hospitals will always be there.”