Significant expansion opportunity: Together with management, we recognized the opportunity to generate favorable returns. First, the hospital sector, which experiences cyclical weakness, often presents experienced hospital management teams with opportunities to acquire assets at attractive valuations. Second, once acquired, Vanguard's superior management skills allowed them to begin the process of converting under-managed, not-for-profit facilities into efficient, for-profit facilities. By working in partnership with experienced management teams such as Vanguard's, the medical staffs of these facilities have been able to expand the breadth and depth of their service offerings, thereby increasing their competitive position in their markets.
In September 2004, we consummated a transaction in which Blackstone Capital Partners IV purchased a majority equity interest in Vanguard.
The Fund continues to hold a minority interest in the company and maintains a board seat and an active dialogue with the management team.
