PRINT THIS PAGE More secondary buy-out activity as HgCapital buys Castlebeck Care from 3i23/07/2002. Source: AltAssets. 
 UK venture firm 3i's sale of Castlebeck Care to HgCapital has provided yet more evidence that secondary buy-outs are almost the only liquidity opportunity available to private equity firms.
HgCapital is believed to have paid around £45m for Castlebeck, compared with the £5m 3i invested in the buy-out three and a half years ago.
Castlebeck is a specialist provider of residential healthcare for adults with learning difficulties and challenging behaviours. The residential healthcare sector has become an increasingly popular target for private equity firms in recent years, representing a growth sector with steady revenues.
The management team originally backed by 3i, Brian Stevens and Kevin Davis, will retire after a short handover period. HgCapital has already appointed Chris Sandham as chief executive. He was CEO of Priory Healthcare, another of the firm's healthcare investments.
The ongoing collapse of public markets and mounting concerns about the economic outlook have badly hit the private equity industry. The IPO market is effectively locked shut and corporates are more focused on disposing non-core assets than looking at new acquisitions.
This combination has made it tough for many private equity firms to exit their investments. One of the only options has been selling onto to other cash rich buy-out firms.
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