• January 23, 2022

Activist investor purchases $900 million in Centene

Nov 4, 2021

Newly-launched hedge fund Politan Capital Administration has bought a $900 million stake in Centene Corp., the St. Louis-based insurer confirmed Wednesday.

Politan is headed by activist investor Quentin Koffey, who left Senator Funding Group in August to start out his personal hedge fund. Koffey is now concerned with refreshing Centene’s board and different actions geared toward growing the corporate’s worth, the Wall Road Journal initially reported. In a information launch, Centene stated it plans to develop adjusted web revenue margins 3.3% by 2024 by scaling sure companies and promoting different “non-core” elements.

“We welcome constructive concepts to reinforce these efforts,” Centene wrote.

And the corporate has already made strikes. The insurer introduced on Wednesday it’s going to promote its majority stake in dwelling well being supplier U.S. Medical Administration to non-public fairness companies Rubicon Companions, Valtrius, Oak HC/FT and HLM Enterprise Companions. The phrases of the deal weren’t disclosed, and Centene will proceed to carry a minority stake in USMM.

Centene will use the proceeds from the sale to repurchase inventory, Sarah London, vice chairman of Centene’s board of administrators, stated in a information launch.

“We’re assured this transaction will finest place USMM to increase its attain and influence whereas serving to Centene to ship on our worth creation plan,” London stated.

Centene stated it has additionally centered on updating its board.

Koffey beneficial former WellCare Well being Plans CEO Kenneth Burdick and previous Anthem chief monetary officer Wayne DeVeydt be part of the insurer as board administrators, WSJ stated. A chance to replace the corporate’s board will open later this month. Centene paid $17 billion for Medicare Benefit insurer Wellcare in 2020. Koffey didn’t instantly reply to interview requests.

Over the previous two years, Centene stated it has added 4 new administrators to its board, three of whom are unbiased. The newest addition got here in September when Sarah London, who serves as president of the corporate’s non-insurance well being care enterprises division and government vice chairman of superior know-how enterprise line, was appointed vice chairman of the board.

A month after the announcement, David Steward retired from Centene’s board after 14 years of service. He stated he needed to spend extra time along with his household and pursue different enterprise pursuits.

“The corporate intends to make additional adjustments to the composition of the board and variety will proceed to be a robust consideration,” the insurer stated.

The insurer has made different latest, and abrupt adjustments, to its personnel.

In September, Brent Layton was additionally named chief working officer of Centene and the workplace of the president modified its identify to the workplace of the chairman and CEO. Centene is headed by long-time CEO Michael Neidorff.

Later that month, Centene and long-time government Jeffrey Schwaneke “mutually agreed” that he ought to resign, after 13 years of labor on the insurer. Schwaneke had extra just lately served as government vice chairman of healthcare enterprises, the place he was transferred to 6 months earlier than as a part of the insurer’s skilled improvement program. The switch moved him from reporting to the insurer’s prime workplace to Sarah London. No additional particulars had been disclosed.

On the finish of October, Centene and former government vice chairman and chief technique officer Jesse Hunter additionally agreed to half methods, with Hunter’s final day being Nov. 5 quite than on the finish of 2021, in keeping with a submitting with the U.S. Securities and Alternate Fee. The insurer didn’t disclose why Hunter was ending his 19-year stretch on the firm early.

On the finish of the corporate’s most up-to-date third quarter on September 30, Centene reported $32.4 billion in income, up 11% from the $29.1 billion reported throughout the identical time final 12 months. The corporate reported web revenue of $584 million, up 4% from $561 million reported throughout the identical time final 12 months.

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