Infranode and DIF have teamed up to acquire a portfolio of 41 care homes, four rehabilitation centres and seven pre-school facilities, most of which are located in the Greater Oslo Region.
Nordics-focused Infranode will own 60 percent of the portfolio, while Dutch fund manager DIF will acquire the remaining 40 percent. Neither firm disclosed financial details.
The deal represents a milestone of sorts for both firms. For Infranode, it is the firm’s first investment in the social infrastructure sector, while for DIF, it’s the first social infrastructure investment that is not a PPP.
The Netherlands-based firm has roughly 40 investments in the sector, ranging from a high school in Ireland to clinics in Germany to student accommodation in Australia, but all are within the PPP framework.
“A large part of the healthcare and childcare markets in the Nordics have been state-driven,” DIF partner Willem Jansonius, told Infrastructure Investor. “Several years ago, these markets were privatised but still with strong government incentives funding in place. It has now become a basic right to send your child to kindergarten or to get care in your own home,” he continued.
“That has driven a strong growth in the private healthcare sector in Norway, Sweden and Finland. And a lot of these care assets are under long-term contracts, so that made it a very robust infrastructure-like asset with strong, stable cashflows,” he said, explaining DIF’s decision to invest in the asset.
According to the statement, the facilities are operated by private health and care service providers under public service agreements with Norwegian municipalities and regional health authorities. The term of the contracts are typically 15 to 20 years long, Jansonius said.
Asked what Infranode and DIF are planning for the portfolio, Jansonius responded: “We will be adding capacity at the existing sites as there is a lot of growth and demand for care due to Nordic countries’ ageing demographics.
“Constructing new buildings adjacent to the existing facilities is a very likely approach, but we will also be looking at add-on acquisitions,” he noted.
DIF is funding its portion of the acquisition through its Core Infrastructure Fund I, a vehicle it closed on €450 million last year.
While Infranode did not specify how it’s funding its share of the investment, the Swedish firm is in the process of deploying its maiden infrastructure fund, Infranode I, which it closed on €450 million last December.
The firm could not be reached for comment.