Latest news with #privateequity
Yahoo
4 hours ago
- Business
- Yahoo
Private equity is turning mobile homes into health hazards. What can governments do?
Four years ago, Valeria Steele's West Virginia mobile home park was purchased by Homes of America, a subsidiary of well-known 'vulture fund' Alden Global Capital. The private equity giant has become infamous for buying distressed newspapers, cutting staff, offloading assets and loading them with debt. 'They don't make any attempt to sell them,' Steele says. 'They don't make any attempt to repair them. And that's the norm among a lot of their properties.' Sure enough, after Homes of America's purchase, lot rents jumped and tenants reported major problems like collapsing floors. The park has rapidly been emptying, maintenance has stalled, and rent checks have been lost. According to a new report, tenants in manufactured housing parks like Steele's are also facing serious health hazards. Tenants have reported poor quality drinking water, frequent water shut offs, plumbing failures, and debris from vacant homes that were never emptied out. The new research, published by Human Impact Partners and advocacy group Manufactured Housing Action (MHAction), is based on 20 interviews with Homes of America, tenants across five states and information from public records. The private equity company owns about 144 manufactured housing communities across the United States, according to estimates by the Private Equity Stakeholder Project and Manufactured Housing Action. Homes of America did not respond to a request for comment. Researcher Will Dominie tells Next City that partnerships between tenant organizers and government are vital to reigning in abuses of power by private equity firms in housing. 'These companies are so powerful. They have so much money. They have so many lobbyists. They have so many lawyers,' Dominie says. 'It's going to take the combined power of residents organizing [and government].' Paul Terranova, an organizer with MHAction who collaborated on the report, tells Next City that tenants organizing against Homes of America have made 'very important but still partial' victories over the company. Tenants near Flint, Michigan, have seen Homes of America plead guilty to criminal charges carrying a $25,000 fine and agree to sell their park. In Elkins, West Virginia, Steele and her fellow tenants are awaiting a settlement from their class action lawsuit against the company. While tenants in manufactured housing face unique challenges, the report's policy recommendations apply to the housing crisis at large. These recommendations include strengthening housing standards and tenant protections, supporting community ownership and limiting corporate speculation. When Elena Smith signed her lease for a trailer in Lake Suzanne Mobile Home Park in Shiloh, Illinois, management told her the property had new owners and that changes would be made. Over the course of two years, she experienced conditions that lead her to two 'mental breakdowns,' she says. In a trailer with poor insulation, the air conditioning would go out in the height of summer or the heat in the dead of winter. When maintenance finally came to fix it, they found that the duct had been torn open by an animal burrowing inside. Management would shut off water in the park with no notice and give vague replies when asked when it would return. When the water did work, she still drank bottled water because the shower irritated her eczema. 'I used to think I had dandruff. I don't have dandruff,' Smith says. 'Because I moved somewhere else and my scalp is fine. It doesn't flake anymore.' In the report, researchers documented water quality violations at five Homes of America parks that included heavy metals, nitrates and fecal contaminants that could be linked to skin and gastrointestinal issues. Interview participants in four states reported sporadic water cut offs. All 20 residents interviewed bought bottled water for daily needs, spending up to $200 per month. Smith says she and her sister paid out-of-pocket for ant traps, gallons of water for cooking and flushing the toilet, a window AC unit and motel stays when the conditions got too hard to manage. Finally, Smith's sister took out a loan so they could afford to move. While she lived at Lake Suzanne, Smith says she saw trailers disappear as city inspectors condemned them. The report cites inspection records listing 20 units 'unfit for habitation.' 'I left a very dangerous situation and so to live like that … it was almost like 'why did I leave if I'm going to live like this?'' Smith says. The stress of her living situation drove Smith to contemplate suicide because it felt inescapable. 'It's degrading to live that way,' Smith says. 'It's degrading to not be able to flush your toilet every time you use it and to let your mess sit in the toilet because you have to ration out the water to flush your toilet—to only be able to flush it once a day or not at all.' Smith tells Next City that tenants in her old mobile home park still live the way she used to and don't speak up because they're afraid to lose their homes. While she no longer lives at Lake Suzanne, Smith stays connected to Terranova to help with the tenants' fight and use her experience to bring attention to the situation. Terranova and Dominie say manufactured housing doesn't have the same regulations as traditional rentals and tends to get less attention. These parks are often in rural places with few protections and house populations that are vulnerable to exploitation, such as low-income, elderly, disabled and immigrant tenants. But there are a few states that have more robust legislation for how to regulate manufactured housing. Researchers frequently cited Colorado regulations—a state with no Homes of America parks—as policies that could be adopted in other jurisdictions or on a national level. Colorado has a right to counsel for mobile home residents, protection from retaliation, tasks its state health department with testing and enforcing water quality standards at mobile home parks, and registers parks in a database. A registry of mobile home parks may seem inconsequential, but researchers note that 'enforcement depends on accurate ownership data, which can be difficult with corporations that often hide behind multiple shell LLC companies.' After her park changed hands, Steele had to dig into public records and connect the dots between different Alden Global Capital affiliates to find out who owned it. Steele has also seen the importance of tenant protections from retaliation. After taking part in a class action lawsuit and informing her neighbors about unlawful eviction, Steele was sued by Homes of America and countersued for retaliation. Colorado also has a way researchers say governments can limit corporate speculation on manufactured housing communities. Manufactured homes can be attractive investments to speculators who want to close them and repurpose the land for other uses—and local governments can prevent this. Boulder, Colorado, uses preservation zoning to make it harder to reclassify and convert park land to different uses. As more and more of the trailers around her become vacant, Steele thinks Homes of America plans to empty out her park and redevelop the land. If the area becomes popular for different kinds of housing or vacation rentals, 'they'd be on the forefront,' she says. The report's policy recommendations only highlight protections that exist in states where Homes of America does not operate and which can serve as posts for regulating manufactured housing. 'The most predatory companies tend to choose to operate in the states that have the least protections,' Terranova says. This story was produced by Next City, a nonprofit newsroom covering solutions for equitable cities, and reviewed and distributed by Stacker.
Daily Mail
a day ago
- Business
- Daily Mail
Tycoon's astonishing divorce court confession sends shockwaves through Wall Street
The boss of an $800 million private equity firm suddenly announced he has Alzheimer's disease in the middle of a divorce hearing. Health Point Capital managing partner John Foster, 83, has been locked in a bitter divorce with his estranged wife Stephanie Foster, 57, for four years. Foster claimed her extravagant spending habits wiped out his $45 million fortune and he is almost 'destitute', but Stephanie insists he is hiding assets. His lawyers previously claimed Stephanie blew money on designer clothes and other luxuries 'at a rate that… none of us can conceive'. Stephanie Foster's camp instead rubbished claims Foster was suddenly $12 million in debt when his wife filed for divorce, which may also come as a shock to his shareholders. She said he was still flying on his private jet between New York and Florida for Botox, hair dye, and manicure appointments. Foster also sold a sprawling eight-bedroom, nine-bathroom mansion on the ultra-exclusive Fishers Island, Massachusetts, for $10 million last October. But his claims of being unable to remember documents he signed, or where his wealth was allegedly stashed, became more believable on Wednesday. During his second day on the stand in the Manhattan Supreme Court he dropped the health bombshell which is likely to enrage his shareholders. 'I'm 83-years-old, I have recently had an MRI, which is a brain scan for my Alzheimer's,' he said, totally unprompted, according to the New York Post. Stephanie's lawyer Rita Glavin, who was stunned by the news, asked him to confirm his diagnosis, and he replied 'yes and I am being examined' for it with the MRI. However, he later said in his testimony that he couldn't remember why he got the MRI, or what he said earlier in his evidence. He also spent part of the hearing scrolling through his phone and had to be admonished by Glavin. Concealing his condition could open Health Point Capital to shareholder or investor lawsuits and potential action by the SEC, experts told the NYP. Exactly when Foster was diagnosed and how much his business partners knew about his illness was not disclosed. Foster said he was placed on leave several weeks ago due to 'other litigation not to do with this proceeding', which he also had not told the court before. He is still listed as the first managing partner on the firm's website . Glavin then asked if the 'other litigation' was claims he used company accounts to hide personal income, and Foster responded by ending the hearing. 'Judge, I think we should close for the day, I'm not up for it,' he said, the NYP reported. The court previously heard the 15-year marriage broke down after Foster frequently cheated on his wife. But Stephanie previously said the last straw was him telling her, 'I don't care what happens to you when I die.' Glavin previously told the court how Foster added $3 million to his bank account in one year and splurged $800,000 on a Hinckley yacht. Foster also owns a ranch in Texas filled with exotic African animals including oryx, sable and zebra, a Gulfstream IV-SP jet, and a mansion in The Breakers on Palm Beach, Florida. Stephanie produced a text message exchange between Foster and the family lawyer that she claimed was proof he was hiding his wealth. 'Your net-worth strategy worked. Steph is stunned. Told me I'm bankrupt! She's very upset!' he wrote.
Reuters
a day ago
- Business
- Reuters
Italy's Moratti, Gavio families invest in Canzonieri's Nextalia private equity firm
MILAN, May 30 (Reuters) - Nextalia, the private equity firm founded by former Mediobanca and Barclays investment banker Francesco Canzonieri, said on Friday that Italy's Moratti and Gavio families had become shareholders. Nextalia said the investment vehicles of the two families would buy into a capital increase with two representatives, Angelomario Moratti and Francesco Vercesi, respectively joining its board of directors. "This confirms Nextalia's role as the go-to independent investment platform for private markets to support Italy's real economy," it said. The Moratti family, who used to own top-tier soccer club Inter Milan, last year agreed to sell 35% of their oil refiner Saras to global commodity trader Vitol. The Gavio family is the main shareholder in toll-road operator ASTM. Nextalia said its new Nextalia Flexible Capital fund had raised 370 million euros ($419 million) in three months, more than targeted, and would garner more in the next few months thanks to ongoing investor interest. It has also started marketing its Nextalia Credit Solutions fund, set up at the end of March, which aims to raise 200 million euros from professional investors. Nextalia said it had named Leonardo Adessi as chief investment officer (CIO) for its credit division, replicating the model adopted for its equity operations where the running of various funds is coordinated by a single CIO. ($1 = 0.8829 euros)
News.com.au
a day ago
- Business
- News.com.au
Criterion: Healthscope's collapse puts private hospitals in a world of pain, but there's still a faint pulse
The unlisted Healthscope's misfortune casts the spotlight on the listed Ramsay Health Care Private hospital profitability has shrunk, but the sector still accounts for more than 40% of admissions Ramsay's rehab includes putting its loss-making French business up for sale Private hospital operator Healthscope's lapse into administration this week highlights the role sector's financial woes that have been brewing for years – along with that of the private equity owner's excessive debt. As the country's second biggest hospital operator, the unlisted Healthscope is a case of 'too big to fail'. The operating business is expected to be sold and recapitalised, with lenders and landlords taking a suitable haircut. Notably, the Commonwealth Bank (ASX:CBA) was comfortable enough to extend a $100 million loan to keep the wards ticking over across Healthscope's 37 hospitals. But the structural pressures will remain, with private insurance payors not adequately compensating the hospitals for ratcheting costs (notably wages). The insurers, in turn, are being squeezed by the government's control over premium increases. At the same time, medical advances mean more procedures are done via day surgery, which is less lucrative. The private hospital sector should have much going for it, given the ageing populace and the pressures on the public hospitals. According to the Australian Private Hospitals Association, the 'privates' accounted for 41.2% of all hospital admissions in the 2022-23 year, a gain on the pre-pandemic 40.3% share in 2018-19. They also account for 705 of elective procedures. Global expansion puts Ramsay in the sick bay Healthscope was listed until 2019, when it was purchased by private equity. That leaves Ramsay Health Care (ASX:RHC), the country's biggest operator, as the only ASX-listed exponent. Ramsay owns or operates 76 hospitals and clinics locally, as well as 34 in the UK and 244 in Europe. In a misguided expansion, Ramsay acquired just over half of French group Ramsay Sante – the crux of its European ops – for around $140 million in 2010. Sante means 'good health' but there hasn't been much of that. In early 2022 Ramsay then acquired Elysium, which runs mental health and rehabilitation facilities in the UK, for $1.5 billion. The French and UK hospitals face similar headwinds to the local sector – probably more so given the reliance on governments that have been equally stingy with keeping up with cost inflation. As a result, Ramsay's overseas operations have performed worse than its local ones, resulting in the board's decision to find a buyer for Ramsay Sante. In the words of Allan Gray analyst Tim Hillier, 'grossly inadequate government funding has made Ramsay Santé an unsustainable essential services charity.' Serious but stable condition Ramsay shares have declined around 25% over the last year and halved over the last five years. Despite this decline, most brokers have a 'hold' call on the stock. In other words, they think Ramsay's condition will improve but they're not braving a 'buy' call until a peer puts their delicates on the line first. Ramsay CEO Natalie Davis describes 'significant value and growth opportunity' in the Australian business, albeit with a 'multi-year transformation required.' In the first (December) half, Ramsay reported a 6% revenue increase to $8.54 billion, with a reported loss of $105 million but underlying earnings from continuing operations steady at $500 million. But Elysium's earnings declined 41% to $14.9 million, while Ramsay Sante's contribution fell 23% to $102 million. Ramsay is pursuing operational improvements and tightening capital expenditure'. Value emerges amid aversity While myriad risks remain, Ramsay's subdued valuation arguably more than compensates for them. One wildcard is that Ramsay will receive a better-than-expected price for the French ops. In any event, the divestment would remove a gangrenous limb. There's also the 'replacement value' consideration. Allan Gray's Hillier notes a new 100-bed hospital would cost $150 million today – and Ramsay has 9300 beds across its network. Ramsay's $8 billion market cap also pales against the $30 billion, $88 a share billion cash bid lobbed by private equiteer KKR in 2022. The unrequited deal offers some glimpse of the potential upside should Ramsay's stint in rehab prove successful. But as broker Wilsons cautions: 'this situation is going to get harder before it gets easier. Easier means change and change is hard'.
Arabian Business
a day ago
- Business
- Arabian Business
Seed Group partners with B2B travel platform Tumodo to advance UAE business travel management
Companies in real estate, renewable energy, private debt and pre-IPO stocks are said to be among the leading ones which are eyeing raising billions through crypto token launches to fund their projects
