The Nordic demographic transition is reshaping economies and societies at an unprecedented pace. Sweden, in particular, stands at the forefront of this shift, with its aging population and shrinking workforce creating both challenges and opportunities. For investors, the aging care sector in Sweden represents a compelling case study in identifying undervalued real assets amid structural change. Northern Horizon’s Aged Care Social Infrastructure Fund, a €1.2 billion vehicle targeting Nordic care properties, exemplifies how strategic capital allocation can align with demographic tailwinds and sustainability goals.

The Demographic Imperative

Sweden’s population is aging rapidly. By 2030, the number of residents aged 80 or older is projected to reach 812,000, a 160,000 increase from current levels. This surge is driven by the post-war “baby boomer” cohort entering their 80s and a fertility rate of 1.43—well below the replacement level of 2.1. Meanwhile, the working-age population (25–66) is expected to grow by only 13,000 between 2023 and 2033, creating a stark imbalance. The result? A labor shortage in elderly care that will require 75,000 additional workers by 2033, according to Statistics Sweden.

This demographic pressure is not merely a social issue but a structural investment opportunity. The demand for high-quality care facilities is outpacing supply, particularly in urban centers like Stockholm, where digital health innovation is accelerating. The Swedish government’s 2025–2028 dementia strategy, backed by SEK 100 million in funding, further underscores the need for modernized infrastructure.

Northern Horizon’s Strategic Position

Northern Horizon’s Aged Care Social Infrastructure Fund has positioned itself at the intersection of these trends. With 65 properties across the Nordics—68% in Sweden—the fund targets modern care homes leased to both public and private operators. Its portfolio is aligned with ESG criteria, including a net-zero operational carbon target by 2030, and has earned an 89/100 score in the 2024 GRESB Real Estate Assessment. This sustainability focus is critical, as institutional investors increasingly prioritize assets with measurable social and environmental impact.

The fund’s geographic concentration in Sweden reflects the country’s unique demographic profile. While the Nordic region as a whole has seen a 31% increase in the elderly population since 1990, Sweden’s aging trend is exacerbated by its relatively small population (10.7 million in 2025) and uneven regional growth. Northern Horizon’s localized approach—managing assets from Stockholm, Helsinki, and Copenhagen—enables it to navigate these disparities and capitalize on underutilized properties in high-demand areas.

Undervalued Real Assets in a Retrenching Market

Despite the long-term demand for elderly care services, Sweden’s real estate market has experienced a sharp correction. In 2024, combined transaction volumes for Sweden and Finland fell to €507 million, a 44% decline from 2023. This retrenchment, driven by rising interest rates and economic uncertainty, has left many care properties undervalued. For patient investors, this creates an entry point to acquire assets at discounted prices while benefiting from the sector’s resilience.

The broader European context reinforces this opportunity. While the UK and Germany have seen a resurgence in care property investments, Sweden remains relatively untapped. Cross-border capital flows are intensifying, with international investors seeking stable, long-term returns in markets with strong demographic fundamentals. Sweden’s aging population and government-backed reforms—such as public-private partnerships for healthcare infrastructure—position it as a strategic hub for value creation.

The Path Forward: Policy, Innovation, and Patience

To fully realize the potential of this sector, investors must align with policy-driven reforms and technological innovation. Sweden’s emphasis on “aging in place” and digital health solutions is transforming care models, reducing costs, and improving outcomes. Northern Horizon’s focus on modernizing facilities with energy-efficient designs and dementia-friendly layouts aligns with these trends, enhancing both social value and asset performance.

However, success requires patience. The sector’s current liquidity constraints mean that competitive bidding is limited, and operational performance is under scrutiny. Investors must prioritize assets with strong tenant relationships, sustainable operating models, and proximity to urban centers. The recent slowdown in immigration also highlights the need for workforce development strategies, which Northern Horizon addresses through partnerships with municipalities to optimize staffing and reduce turnover.

Conclusion: A Win-Win for Investors and Society

Sweden’s aging care sector is a microcosm of the broader Nordic demographic transition. For investors, it offers a rare combination of undervalued real assets, long-term demand, and policy support. Northern Horizon’s strategic entry into this market demonstrates how capital can be deployed to address societal challenges while generating attractive returns. As the sector rebounds from its 2024 slump and demographic pressures intensify, Sweden’s elderly care infrastructure is poised to become a cornerstone of sustainable investing in the Nordics.

In an era of global uncertainty, Sweden’s aging care sector stands out as a beacon of resilience and innovation. For those with the foresight to act now, the rewards could be substantial.