Apparently, people with autism have become quite valuable as a tradable commodity.
Just take a look at a recent report issued by the Private Equity Stakeholder Project, a watchdog group that shines light on the dirty doings of the private equity industry. The report, titled “The Kids Are Not Alright: How Private Equity Profits Off of Behavioral Health Services for Vulnerable and At-Risk Youth,” notes that, since 2017, there has been “a flurry of private equity acquisitions” of autism service providers.
Some examples: In 2018, the Blackstone Group acquired the Center for Autism and Related Disorders for a reported $700 million. In 2021, Cerberus Capital Management acquired Lighthouse Autism Center for more than $400 million.
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Center for Autism and Related Disorders in Plano, Texas.
The Private Equity Stakeholder Project sees this as an ominous trend because of the voracious greed that motivates private equity firms. As the report so diplomatically observes, “Private equity firms often aim to double or triple their investment over four to seven years. The pursuit of these outsized return expectations over relatively short time horizons can lead to cost-cutting that hurts care. In addition, use of high levels of debt can divert cash from operations to interest payments and dividends paid out to private equity owners.”
Autism service providers aren’t the only potential profit centers that make private equity investors drool. The report says private equity firms have also taken over youth foster care, juvenile justice, and troubled teen programs.
And what a goldmine it has been! The report describes how in 2019, just six months after acquiring the Mentor Network, which provides foster care as well as residential and community services to children and adults with intellectual and developmental disabilities, Centerbridge Capital and the Vistria Group paid themselves a $100 million debt-funded dividend on the company. Last February, Centerbridge and Vistria took out even more debt on Mentor, in part to pay themselves an additional $375 million dividend, the report also says.
When these shrewd investors see your smiling faces, it warms their hearts and turns their pupils into dollar signs.
In 2021, according to the report, four companies that operate homes for people with intellectual and developmental disabilities were added to the portfolio of Mentor, which is now called Sevita, along with assorted residential and assisted living centers in seven states.
So look out, people with autism: You’re next. When these shrewd investors see your smiling faces, it warms their hearts and turns their pupils into dollar signs.
In the 1967 movie, The Graduate, starring Dustin Hoffman, there’s a classic scene where an older man gives some unsolicited business advice to Benjamin, Hoffman’s character. The man says, “Just one word: Plastics. There’s a great future in plastics.”
If that movie took place today, the man’s sage business advice would be, “Just one word: Autism. There’s a great future in autism.”