Children's homes hit by buyout fears
Experts say private equity firms now control 30 per cent of the independent foster agency market. Last December, Sovereign Capital bought the country's second largest foster agency, NFA, and at least six big agencies have fallen to private equity players. Sources say foster businesses are keen to turn to private equity as a ready source of capital to fund rapid expansion.
The trend has sparked deep unease among children's charities, who say private equity-backed foster agencies are piling extra work on social workers and will raise charges to local authorities. Kevin Williams, chief executive of The Adolescent and Children's Trust (Tact), the UK's largest fostering and adoption charity, said: 'This is not an issue for us about the private sector operating in foster-care. Our issue is with private equity firms, their stated aim of maximising profits for shareholders and operating for short-term gain. This is not compatible with providing long-term care for some of the most vulnerable children in society.'