Scott Marinchek, the founder of Mariner Financial Third Age Retirement Living, aims to secure a business partner to distribute a range of funds targeting the retirement living and aged care sectors in the first quarter of 2009.
Marinchek, who acquired the intellectual property of Third Age from Mariner as that cash-strapped business continues its orderly winddown, is assessing the specific risk exposures that investors in the retirement sector want access to. The funds would probably access exposures to the properties and infrastructure upon which retirement living facilities stand, in addition to the healthcare and recreation businesses and services being run on the premises.
“Some investors are comfortable with exposure to business operations; some are comfortable with exposure to direct property. Some aren’t, but like the retirement theme,” Marinchek said. “We ultimately want to provide opportunities to invest in assets – like property, and in the operations of businesses and care services – that appreciate with the costs of retiring and act as a hedge against these costs.” Marinchek joined Mariner in 2007 and became an executive partner in the Third Age business, which was still developing funds when he left.
He said the new business partner “would probably be an existing institutional funds manager with exposure to infrastructure and one that has the internal systems required” to operate the retirement sector funds. An incubator of alternatives managers had already showed interest in distributing the products, but did not hold the long-term focus required to support investments such as aged care infrastructure, Marinchek said. “Their platform was more focused on short-term investment horizons, like hedge funds, and those that include an exit, like private equity funds.
” If a new company was founded to distribute and administer the funds, it would most likely be launched with the backing of a venture capital investor. Marinchek predicted the entry of new investors into the retirement sector, as some large operators succumb to market volatility, would change the business models of retirement and aged care accommodation and services. The acquisition of Babcock & Brown Communities by Lend Lease and the inclusion of aged care facilities in the AMP Capital Investors infrastructure fund were examples of new players moving into the sector.