Activist investor purchases $900 million in Centene

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 begin his personal hedge fund. Koffey is now occupied with refreshing Centene’s board and different actions aimed toward growing the corporate’s worth, the Wall Avenue Journal initially reported. In a information launch, Centene mentioned it plans to develop adjusted web earnings margins 3.3{9408d2729c5b964773080eecb6473be8afcc4ab36ea87c4d1a5a2adbd81b758b} by 2024 by scaling sure companies and promoting different “non-core” elements.

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

And the corporate has already made strikes. The insurer introduced on Wednesday it is going to promote its majority stake in house well being supplier U.S. Medical Administration to personal fairness corporations 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, mentioned in a information launch.

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

Centene mentioned it has additionally targeted on updating its board.

Koffey really useful 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 mentioned. A possibility 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 mentioned 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 govt vice chairman of superior expertise 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 mentioned 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 powerful consideration,” the insurer mentioned.

The insurer has made different current, 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 title to the workplace of the chairman and CEO. Centene is headed by long-time CEO Michael Neidorff.

Later that month, Centene and long-time govt Jeffrey Schwaneke “mutually agreed” that he ought to resign, after 13 years of labor on the insurer. Schwaneke had extra lately served as govt 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 high workplace to Sarah London. No additional particulars had been disclosed.

On the finish of October, Centene and former govt vice chairman and chief technique officer Jesse Hunter additionally agreed to half methods, with Hunter’s final day being Nov. 5 relatively than on the finish of 2021, based on 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{9408d2729c5b964773080eecb6473be8afcc4ab36ea87c4d1a5a2adbd81b758b} from the $29.1 billion reported throughout the identical time final yr. The corporate reported web earnings of $584 million, up 4{9408d2729c5b964773080eecb6473be8afcc4ab36ea87c4d1a5a2adbd81b758b} from $561 million reported throughout the identical time final yr.

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