Home / Business and Economy / Senate Probes Private Equity in Child Care
Senate Probes Private Equity in Child Care
25 Mar
Summary
- Senator probes private equity's influence on child care safety.
- Firms KinderCare and Learning Care Group are under investigation.
- Concerns raised over profit motives versus child welfare.
U.S. Senator Jeff Merkley is investigating the impact of private equity firms on child-care facilities, raising concerns that profit motives may be overriding child welfare. The probe specifically targets KinderCare Learning Companies and Learning Care Group, the two largest private equity-backed child-care providers in the United States. Senator Merkley has requested extensive financial and safety records from these firms.
The investigation stems from research suggesting that private equity's profit-driven model can conflict with the best interests of parents and children. This scrutiny of private equity's influence is part of a broader trend, with similar challenges arising in other sectors like housing and healthcare.
KinderCare, supported by Swiss firm Partners Group, serves over 200,000 children across approximately 1,500 facilities. Learning Care Group, backed by American Securities, operates over 1,150 schools nationwide. Both companies have reportedly faced state citations for supervision and safety issues.
Senator Merkley highlighted concerns that these firms have engaged in dividend recapitalizations, a practice where companies borrow money to pay shareholders, potentially undermining financial health. He emphasized the need for full cooperation with the investigation to examine the requested documents and information.
