An international private equity fund that aims to make a social impact with its investments is now tying itself to home health care in the U.S.
London-based Bridges Fund Management was started overseas in 2002. Now, its U.S. Sustainable Growth Fund is making its mark domestically as a lower- to middle-market private equity fund that provides capital, sector expertise and strategic support to management teams.
Moving forward, Bridges is looking to grow a post-acute care platform company. Last week, it announced it had made an investment in Richmond, Virginia-based James River Home Health.
“As a social impact-oriented private equity firm, we are deploying a dedicated pool of capital focused on providing growth opportunities to established businesses that, in some way, are beneficial to people or the planet,” Elizabeth Burgess, the head of growth business in the U.S. for Bridges, told Home Health Care News.
Bridges’ portfolio consists of a variety of companies mainly focused on community-based housing and health care.
Founded in 2013, James River provides skilled home health and hospice care services to patients in the Richmond metro market.
In normal circumstances, winning the support of a large PE fund is likely something to celebrate. But during the COVID-19 emergency, extra cash on hand — particularly for a provider with growth aspirations — is a more-than-welcomed development.
“I’m not about to tell you a giant secret, but the health care market is a very tight market,” James River CEO Shane Maley told HHCN. “And we have limited resources in the number of staff that we can hire.”
James Rivers plans to use the Bridges investment to take its operations to the next level, according to Maley. The company hopes to eventually double or even quadruple its revenue while expanding into a regional provider — or something bigger.
On its end, Bridges feels like it has a handle on where the health care system is going in the U.S. Based on the demographic shift that is coming, the firm felt home health care was a good area to bet on.
“We believe that there is demand for these services,” Burgess said. “And as the demographics of the country continue to evolve and the aging population grows, there will be more need for these services. In combining [that], along with the trends in which individuals are preferring to age in place, we think there will be a greater need for these types of services, home health and hospice.”
Once this trend was recognized by Bridges, it was about finding the right provider. James River’s patient-centered approach met the PE fund’s socially focused criteria.
The immediate goal, of course, is to help James River expand. But the company will also continue to look for similar providers who are doing well with what they have right now, but may be doing even better with some extra cash on hand.
“We’re trying to invest in businesses that will be beneficial to people and to our planet,” Burgess said. “This is an area where finding skilled care workers, maintaining them and providing high quality services has been a challenge. And so when we have looked at the sector, we have always seen that as a difficult piece of the services solution to solve.”
James River’s ability to find skilled workers and provide high-quality services is something that drew Bridges to it in the first place. But during the COVID-19 crisis, every part of running a home health business becomes a bit more challenging.
Bridges expects there to be more post-acute investment opportunities on the horizon.
“I think as things evolve, some businesses may just struggle to get through and come out of the pandemic,” Burgess said. “And they may be in need of capital or in need of an acquisition in a way that they weren’t prior to all of this.”
In the end, Bridges’ investment and the reason for it aligns with many home health insiders’ opinions on the benefits of home health.
“Home health offers a lower-cost option, better quality of care, and it meets the emotional and ethical needs of patients,” Burgess said. “And so that’s why we think it’s an important service aspect and one that has opportunity for both continued growth and probably additional services that can be provided in the home, rather than in a health care institution.”
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