Potential investments of pension funds in long-term care for the elderly: the case of Croatia

1. What do you think are the potentials/problems of the business model of existing homes for the elderly (systems for the elderly)?

       a. Who or what influences these potentials or problems?

2. Can you list the challenges in building long-term care facilities for the elderly in private ownership?

a.  Do these challenges change over time?

b.  Do they become more or less intense in response to the environment in which they are located?

3. Do you think there are prospects in the construction of homes for the elderly and what are their market potentials, looking

a.   from the perspective of private homes for the elderly as an export product/

b.  from the perspective of investment in infrastructure

c.  from the perspective of potential arrivals of large international companies dealing with homes for the elderly?

4. What are the advantages/disadvantages for, and is there a willingness on the part of, pension funds to invest in homes for the elderly?

a.  Why don’t they invest right now?

b.  What are the preconditions for them to invest more significantly (the development phase of the market for homes for the elderly)?

c.  Do you think there should be a regulatory change in pension fund investments?

d.  What are the risks and gains from the perspective of pension investments?

5. Are you planning or considering investing in homes/are you planning to invest in a home from a finance institution side?

a. Do you have any indication of significant new investments in homes for the elderly?

Key categories

Topics

Quotation

The current business model problem of existing homes

Capacity

„The problems are insufficient space, or lack of capacity.“

Waiting list

„ We currently have 270 people on the wating list and many people who applied while they were still mobile…”

Personnel– shortages and the disconnection of different professions

„And this fragmentation and lack of coordination worsens the shortage and lack of human resources in the institution.“

Challenges in the construction of privately owned homes

Strict legal regulations and non-transparent criteria for obtaining accommodation in a state/county home

„It is a long-term battle and struggle because you have to meet all technical standards, conditions, so there are special regulations for the construction of such facilities. “

Real estate market and problems in construction

„The construction industry is affected by the lack of labor, as well asd by rising costs. “

Cooperation in the form of PPP

„So, if one user has thousands of kuna, and our private home is the only home in the area to accommodate this type of user, the public sector should compensate him for the difference. “

Perspective in building homes

Demographic need

„It is simply a need that will develop more and more, we have more and more old population and we are increasingly becoming an older nation. “

Export product

„If we look at Croatia as some kind of tourist destination, a country that bases its economy on the industry, then it could be our export product."

Investment of pension funds in homes

Current investments

“Given that there is currently no company that is listed on the regulated market, whose primary branch of activity is the management of homes in the territory of the Republic of Croatia, we are not able to invest in it.“

Prerequisites

„When investing, ensure that such investment is in accordance with the nature and size of the pension fund’s obligations. Take into account the specific risk and return characteristics of such investment on the overall risk profile of pension funds and impact of that investment on the liquidity of the pension fund.”

Legislation

„Although in principle we welcome changes in the regulations that result in an easier flow of capital between investors and recipients of funds, we believe that the current regulations do not prevent investments by pension funds…”

Risk, profitability and readiness

„We are ready to enter the project if sit is concluded that it meets all the criteria. In this particular case, we believe that a relatively higher risk in the mentioned type of investment would also imply a relatively higher level of yield.“