If only we could see more headlines like this!
The news comes at a time when it is evident we need investment in NHS property.
I am not snobbish about the LGPS (greater Manchester) employing Black Rock to get work done which will benefit its members.
Nor does this look a bad investment. The NHS estate is attractive to investors because it provides long-term inflation-linked returns that are underwritten by the government. The NHS reimburses GPs for the cost of renting the surgeries.
We know how creaky the system has become by our own experience, what is lacking is the capital to get things set up the right way and that should not be sitting in our pension schemes doing no social good . There has to be a more dynamic way to sort out our urgent problems than through funding gilts.
BlackRock has invested in NHS GP clinics as a landlord for 20 years but does not deliver any healthcare services. However, the government has approached private investors such as BlackRock to finance the rollout of up to 200 neighbourhood health centres, with the aim of having one in every community by 2035.
What is important that this is not handing over the NHS to American private equity but working with it.
Earlier this year, NHS landlord Primary Healthcare Properties fended off a takeover bid from private equity group KKR and instead merged with rival Assura in a £1.8bn cash and shares deal.
The combined company owns one in seven doctors’ surgeries in the UK, as well as dozens of healthcare centres, hospitals and dental practices.
The deal was investigated — though cleared — by the Competition and Markets Authority amid concerns that the consolidation could lead to higher rents for the NHS. BlackRock said it set its rents every three to five years, and would take into account inflation in construction and maintenance costs. Yields on the investments are expected to range from 5 to 7 per cent, a person close to the talks said.
There are good examples and not so good. The FT are right to point out that where our pensions are involved there is protection for patients and profit for pensioners. We accept that BlackRock are a major force in the financing of our retirement but also that they need to work with our large pension funds to replace the Government.
I hope we will see more such innovative deals being done to improve the infrastructure of this country’s NHS.