PESP PACE Investment Tracker

The report documents a significant increase in private equity (PE) and venture capital (VC) ownership within the U.S. PACE sector, noting that 15% of all programs now have such backing. It highlights the risks of leveraged buyouts and debt-driven strategies, using InnovAge as a case study to illustrate how aggressive growth and investor payouts can lead to financial instability and regulatory sanctions for care deficiencies. The document also examines the use of federal Opportunity Zone tax incentives to attract healthcare investment and calls for stronger oversight to prevent extractive financial practices in publicly funded elder care.

• Private equity and venture capital involvement in PACE programs has grown significantly, with the number of backed organizations increasing from four to sixteen over a six-year period starting in 2016, a 300% increase.
• As of August 2025, there are 196 PACE programs in the U.S., of which 30 (15%) have private equity and/or venture capital backing. These investor-backed programs serve 11,888 enrollees, accounting for approximately 17% of all PACE participants and 68% of those in for-profit programs.
• For-profit PACE organizations have experienced faster enrollment growth than non-profit peers, with a 13.2% increase compared to 5.7% for non-profits between 2010 and 2022.
• The case of InnovAge demonstrates the risks of private equity ownership, where the firm Welsh, Carson, Anderson & Stowe (WCAS) used debt to fund a $66.1 million dividend in 2019. Despite reducing long-term debt after its 2021 IPO, InnovAge reported annual net losses from fiscal years 2021 to 2025 and maintained negative interest coverage ratios.
• InnovAge has faced extensive regulatory scrutiny, including civil investigative demands from the U.S. Department of Justice and the Colorado Attorney General, as well as expansion freezes in California due to care deficiencies such as missed screenings and improper denials of care.
• A proposed $27 million settlement in July 2025 resolved a class action lawsuit alleging that InnovAge and its PE owners misrepresented operational capacity and regulatory compliance during its 2021 IPO, including allegations that staff were ordered to delete medical records to hide care delays from auditors.
• Private equity firms are utilizing federal Opportunity Zones to gain tax advantages in the healthcare sector, as seen with Nightingale Partners' investment in Edenbridge Health, with the firm targeting internal rates of return of at least 27–30%.

APA

Private Equity Stakeholder Project (2025). PESP PACE Investment Tracker. https://pestakeholder.org/reports/pace-tracker/

Chicago

Private Equity Stakeholder Project. PESP PACE Investment Tracker. 2025. https://pestakeholder.org/reports/pace-tracker/.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=PESP PACE Investment Tracker |date=24 September 2025 |url=https://pestakeholder.org/reports/pace-tracker/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderproject2025pesp, author = {{Private Equity Stakeholder Project}}, title = {{PESP PACE Investment Tracker}}, institution = {Private Equity Stakeholder Project}, year = {2025}, month = sep, url = {https://pestakeholder.org/reports/pace-tracker/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }