We first began investing in healthcare services companies in 1983.  The investments have been made in Europe by our Growth Capital and Buyouts businesses.  This is a key sector for 3i, accounting for almost half of our healthcare portfolio. at 31 March 2007, we had a portfolio of over 23 companies of over €450m

The businesses we partner use a number of strategies to build value:

• By expanding to new geographies, a company can export unique concepts and best practice.  This is the strategy currently being pursued by one of Nordic’s largest healthcare provider, which 3i’s been involved in creating. The Group work with the two brands Carema, which provides healthcare services for the public sector andMehiläinen for the private pay sector. Together, Carema and Mehiläinen provide community care within primary, occupational, specialist healthcare and nursing homes and care for the disabled.
• Some of the strongest opportunities for growth come when we back an innovative new approach that benefits healthcare purchasers and consumers alike.  In the UK, Care Principles is building a ‘care pathway’ for mental health patients – a range of facilities that patients can move between easily as their needs change.  The pathway is the vision of Paul Preston, who is one of our Industrialists in Residence, and now the company’s CEO.
• Another way to create value is to devise a highly-efficient business model and apply it in new territories.  Diagnostic laboratories have traditionally operated on a fragmented basis.  Sampletest’s integrated approach has seen the company expand from its Portuguese base to achieve a leading position across Iberia, with plans to migrate its successful model to France and Italy.

A leading example of a healthcare strategy in action is Westminster Health Care, a UK operator of purpose-built care homes.  Working with an excellent management team, we helped the business to expand to 88 homes and develop some of the country’s leading specialist care facilities.  Our investment, which we sold for €759m in 2004, won the EVCJ award for ‘Buyout Realisation of the Year’.