Patron exits healthcare business, commits to more

The London-based private equity real estate firm has sold Gracewell Healthcare, while hatching plans to invest another £200 million in further care homes with the buyer.

Patron Capital, the, has sold Gracewell Healthcare, a senior living business with 11 communities, to New York-based Health Care REIT and Sunrise Senior Living for £153 million (€191 million; $255 million), it announced today. Patron sold the properties to the REIT and the operating business to Sunrise.

The London-based private equity real estate firm, led by entrepreneur Keith Breslauer, said it also had committed to a £200 million investment partnership with Health Care REIT. That venture would see them collaborate on the purchase of at least five senior living properties per year.

The sale brings to close a four-year investment in Gracewell Healthcare, during which time Patron built up a portfolio of 767 units concentrated in southern England and focused on the private market. However, through its ongoing investment program, the firm will continue to partner with both Health Care REIT and Sunrise Senior Living. Indeed, their future investment pipeline already contains one redevelopment of a community and a further 812 units to be developed.

In the announcement, Breslauer noted that the transaction represented an excellent outcome for all interested stakeholders. “For our clients, we have partnered with a leading luxury care home provider, with a focus on quality of care. Patron now has the opportunity to continue to develop its interests in this sector more rapidly by working with a first-class partner [with whom] we can grow together,” he said. “For investors in our earlier funds, we have yet again demonstrated our ability to deliver excellent returns.”

Patron invested in the business through its Patron Capital Fund III, which attracted €1.09 billion of equity. The capital for the new development partnership will come from Fund IV, which collected €1.1 billion in equity and co-investment.

Last month, PERE revealed that Fund IV now is beyond 80 percent invested. Patron is expected to launch Fund V either at the end of this year or early next year, again targeting €1.1 billion from investors.