Guy McAliece: The important thing is to harness t“he growing asset pool of the super funds to build the streamlining at retirement villages, so the member/investor can go from retirement right through to aged care. If that was made easier then the operators could offer something which would be a viable investment stream. The super trustee has got a better chance of getting compliance from the operator than the individual who’s just trying to purchase a particular unit. So putting the two industries together works quite well.

Amanda White: Are the risks and opportunities in aged care investment being communicated well enough?

Scott Marinchek: With aged care it’s a bit tricky right now in Australia. We have yet to crack that nut. We are continuing to look for opportunities which on a recurring basis provide stable and predictable cash flows for investors, and therefore attract capital from other opportunities such as lower care hostels – which experts say will disappear as a segment as more care comes towards retirement villages or gets pushed up towards ‘aging in place’ opportunities in terms of residential care.

Yet currently in retirement villages we still have a fragmented industry with a few key larger players. And they have a business model which is based on turning people over to get a cash flow in the future. It’s some hybrid between rent and ownership. The United States retirement village market has a much higher preponderance of rental models than we do.

Australia has some amount of strata ownership. A certain high percentage of loan/lease. And a very very small percentage of actual true rental. And operators tell us, we can’t make money running the villages unless we get a big bite of the cherry when people leave.

Well we wonder whether that’s true or not. And so to that extent we look to find the right partners to help us provide opportunities for investors that they can understand, where the risks are explainable. For example we’re doing a transaction right now, a joint venture in Europe, where we are purchasing nursing home properties from a variety of different operators to give them the cash flow they need. They’re paying us a rent. We have no operating exposure. Our investors like that. It’s very clean. There’s a very solid regulatory environment.

Amanda White: So you’re splitting the property elements and the operating elements of the investment?

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