French care-home operator Orpea was once a bet on better retirement. In an aging society, demand for long-term care would only rise — and so would demand for long-term returns, hence why Canada’s top pension fund bought a 15% stake in 2013. It was going to be the virtuous circle of the “silver economy” in action — retirement as an asset class.
The virtuous circle now looks like a vicious one. After years of growth, some 3.4 billion euros ($3.9 billion) has been wiped off Orpea’s market value — and 492 million euros off Canada Pension Plan Investment Board’s stake — in the two weeks since a bombshell book, “The Gravediggers,” by Victor Castanet, published allegations about mistreatment at its care homes.