Spain’s elderly population provides attractive investment opportunity

Spain's Elderly Population Provides Attractive Investment Opportunity

Spain’s Elderly Population Provides Attractive Investment Opportunity

Savvy investors have been focusing on the critical demand created for assisted living facilities and residential geriatric care by the country’s ageing population. The potential for expansion in this business in Spain makes it very attractive to venture capital firms.

Key facts

  • The ageing process resulting from ever longer life spans has been particularly rapid in Spain, to the extent that the number of people aged over 65 has doubled in the space of under 30 years.
  • A recent study by the country’s National Statistics Institute highlights that Spain will have one of the oldest populations in the world by 2050, with 12.8 million residents over 65 years, equivalent to 31.2 percent of the total population.
  • The care of the elderly is a less developed business in Spain than in many other European countries as Spanish families have traditionally looked after their elderly members at home. However, this structure has gradually broken down in recent years due to demographic changes, leaving elderly relatives to rely on third party care services.

Success Stories

In July last year, Magnum Capital bought Geriatros, a leading company in the socio-health care sector, from Galician bank NCG Banco. The acquisition has significant value creation potential as Geriatros manages over 30 residential care homes for the elderly, as well as day centres, and provides care services to homes throughout Spain. Magnum’s move is seen as the catalyst for further expansion of Geriatros’ business.

Other smaller Spanish firms have also been actively involved in investments in the healthcare sector over recent years.

Private Care: A Tempting Market

While Spain does provide publicly-funded care homes for the elderly, obtaining a place in one of these retirement homes is a long and complicated process. Furthermore, swingeing health service cuts implemented over the last two years to reduce Spain’s hefty public deficit has led to a deterioration in the quality of service offered in state-managed residences, as well as a reduction in the kind of assistance offered to the elderly still living in their own homes.

So for those people who have the financial means, privately-run residences and day-care centres which offer more tailor-made services are the answer. Private care homes located in Spain’s coastal areas are also attracting more residents, including from other European countries, due to the fact that many of these homes employ English-speaking professionals and also offer a mix of socio-health care and leisure facilities, taking advantage of the micro-climate in the region.

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