So here’s the thing.
The Old Operating Theatre & Herb Garret is a seriously cool venue. It’s quirky and unconventional, for sure. It’s also symbolic of how the healthcare sector has evolved over the years. Back in the day, for example, the hospital would place a yearly order of 50,000 leeches – equivalent to 8% of its annual budget.
But in this appropriate setting, the talk around this year’s event was not nostalgic – it was firmly in the here and now and what lies over the horizon.
Cooper Parry’s Head of Corporate Finance, Andy Parker, introduced the proceedings with an upbeat statement around the resilience of the healthcare market – despite everything the last few years has thrown at it. And when he mentioned that the day’s second speaker, Clare Connell, wanted to share some forthright views on the sector and its future, he was not wrong.
As CEO of Connell Consulting, a strategy consultancy specialising in European health, social care, pharma, biotech, vets and education, Clare knows a thing or two about the sector and its trends. Her firm has been involved in more than £7 billion worth of transactions and refinancing in the last year alone.
Walking to the front of the old operating theatre to engage with the gathered guests, Clare mentions that – due to her obsession with all things care – many of her family believe she must be a direct descendant of Florence Nightingale. The Latin inscription above the door ‘Miseratione Non Mecede’ (For compassion not for gain), strikes a relevant chord. Now down to business.
Here are some of Clare’s key take outs.
1. UNPRECEDENTED LEVEL OF INTEREST
“This is a fantastic time to be investing in UK Health & Social Care. I really think the level of interest for each
transaction is unprecedented. I would say the level of activity is equal – if not greater – than in 2006/7.”
Interest from overseas investors has been seen across all elements of the sector – from children’s to older
people’s care (incidentally, Connell Consulting grew 60% *in Covid).
2. RECRUITMENT REMAINS A CHALLENGE
No surprise perhaps. But the challenge is being felt in all parts of the care sector. There is a dearth of quality management teams. Great ones come at a premium and there simply isn’t a talent pool coming through. The sector needs to do more to foster and encourage talent. What Covid has done though (small silver lining and all that) is create greater awareness of the sector – and the opportunities within in. As a sector volunteer herself, Clare has experienced this first hand.
3. DISRUPTION IS ALIVE AND WELL
First generation care homes are simply not fit for purpose. Like never before, an investor’s perspective evaluates the quality and suitability of the real estate. The market has completely changed with a move away from large remotely-located hospitals to residential care homes and purpose-built supported living. The benefits of adopting a ‘spend now/save later’ approach (very prevalent in Austistic care) is driving this shift to ensure children and young people are being cared for in the right environment. This trend looks well set to continue and is mirrored with exceptional demands in fostering.
4. A RECESSION ROUND THE CORNER?
Well, if you believe the press – yes. But once again, Clare points to the resilience of the market. “Do I believe a recession will have a major impact of the M&A activity in this sector. Probably not. There’s no question that the UK Health & Social Care sector is strong right now. Overseas investors see the sector as a great place to invest – a safe haven if you will. Huge funds continue to need targets to buy.”
A fast-paced Q&A with Clare and fellow speaker Nuno Almeida followed – covering everything from domiciliary care and ESG impacts to sector pay rates and recruitment challenges – and that was that. The first in person annual event for three years drew to a close. The audience reminded that when it comes down to it, the Health and Social Care sector is a people business – first and foremost.
A BIT ABOUT CLARE
Clare leads the team at Connell Consulting and is well known within the private equity and corporate finance world for her extensive knowledge of health, social care and education. At Connell Consulting, she’s worked on a large volume of substantial transactions, strategic reports and operational improvement projects in the health, social care and special education markets. She won the LaingBuisson Management Consultant Award in 2019 & 2020, and the HealthInvestor Consultancy of the Year Award in 2016 & 2021. Clare was also voted Sector Expert by her peers in the 2018 & 2019 HealthInvestor Power 50.
