In January 1998 Graphite financed the start-up of Clearminster alongside a highly experienced care home entrepreneur. Graphite had previously made a successful investment in the entrepreneur’s first care home business, Kingsclear.

Clearminster was established to create a new nursing home business to capitalise on the rapidly growing need for residential elderly care homes in the UK. Graphite and the co-investor each invested in the venture over a three-year period. Clearminster expanded rapidly, mainly by acquiring and upgrading under-performing care home assets across the UK.

When the business was first established, the sector as a whole was in recession as a result of over-capacity and government pressure on fee rates. The number of care homes being closed and the ageing of the population suggested that the recession was likely to be short-lived as the elderly population continued to rise sharply. The sector also remained highly fragmented with significant opportunities to acquire underperforming assets relatively cheaply.