Archive · 27 Jan 2026
Private Equity Reshapes American Child Care
Private equity firms are buying up many small child-care centers in America.
They want to make bigger chains to save money and charge more.
Some parents like the shiny new centers with apps, but the workers say they are paid less and have to take care of too many kids.
Some states are making new rules to stop private equity from taking over too much.
It's making child care more expensive and harder for workers.
Private equity firms now control 10-12% of America’s child-care market by capacity.
Eight of the 11 largest child-care providers are owned by private equity.
Private-equity-owned chains charge about 50% higher enrollment fees than independent centers.
Private-equity-backed chains have operating margins of 15-20%.
States like Massachusetts and Vermont have passed bills to limit private-equity operations in child care.
- Who
- Private equity firms and independent child-care centers
- What
- Private equity firms are acquiring and consolidating child-care centers
- When
- During and after the COVID-19 pandemic
- Where
- United States, particularly in states like Connecticut, Massachusetts, and Vermont
- Why
- To achieve economies of scale, charge higher fees, and increase operating margins
- Industry Control
- 10-12% of America’s child-care market by capacity
- Largest Providers
- 8 of 11 largest child-care providers owned by private equity
- Enrollment Fees
- 50% higher at private-equity-owned chains compared to independents
- Operating Margins
- 15-20% for private-equity-backed chains
- Teacher Pay
- $18.67/hour at KinderCare vs. $21.50/hour at independent centers
- Regulatory Actions
- Massachusetts and Vermont have passed bills to limit private-equity operations