Providers in the aged care sector have much to think about. In addition to the day-to-day challenges of caring for their clients and managing the concerns of clients’ families, they also have strategic issues to consider. Aged care providers are facing a more competitive environment, have rising compliance costs, a need to expand quality infrastructure, and are seeking to invest more in their staff.
All this takes money – and herein lies another challenge. The investment strategies that underpin their services need to be appropriate for their operations and meet ever-stricter regulatory hurdles. The Royal Commission into Aged Care Quality and Safety established in October 2018 makes this task even more important.
Scott Hawker is Perpetual’s National Manager, Not for Profit Endowments. In this video interview he talks about:
The need for aged care providers to balance liquidity and long-term returns
This is the trade-off all investors face between easy access to cash and the need to earn a rate of return that will help them fund expenses that grow over time.
The importance of a clear investment philosophy
Key to success is the Board and C-Suite agreeing a clear investment philosophy that meets the unique needs of the organisation. For many organisations this will mean balancing short and long-term needs, cashflow management and the always important issue of risk versus return. Larger not-for-profit aged care providers have a substantial ‘float’ of investable funds, and a long horizon that may suit growth-orientated portfolios. Smaller operations are more likely to meet critical mass issues and prefer a more conservative approach.
The importance of investment strategy governance
It’s not enough to have a great investment strategy – it must be documented and adhered to through the market cycle. This layer of committed governance is what helps an organisation manage major policy decisions (such as whether to divest an asset and what to do with the proceeds). In addition to policy and investment rigour, a good governance model provides the transparency that is critical when the Royal Commission is placing every aspect of aged care management under scrutiny.
Looking for advice regarding your organisation’s investment strategy?
If you’d like to learn more about the services Perpetual provides to the Aged Care sector, call Scott Hawker on 02 9229 9319 or firstname.lastname@example.org
JOIN US: AGED CARE INVESTMENT SEMINARS
If you’re in Sydney or Melbourne, come along to our Aged Care Investment Strategy events in September, specifically designed for CFOs, finance executives and board members of aged care organisations.
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MAINTAINING INDEPENDENCE AS YOU AGE
One of our services is Lifestyle Assist which helps people to maintain independence and peace of mind as they go through life. This personal ‘concierge’ service is designed for clients who might need help with anything from paying bills to the day-to-day management of their property. Get in touch if you think you or a family member could benefit from such a service.