Dive Brief:
- NYC hedge fund Glenview Capital Management, headed by Larry Robbins, has pulled back sharply on its healthcare investments despite its usual emphasis on the industry, Modern Healthcare reported.
- Glenview's latest regulatory filing shows it has unloaded stock in hospital chains, including all of its 11.59 million shares of Community Health Systems and all of its 1.21 million shares of Universal Health Services, though it held onto its shares of HCA and Tenet Healthcare.
- The hedge fund overall reduced its shares in 11 of 16 healthcare companies during the first quarter, including Aetna, Anthem, Cigna and Humana, which await uncertain state and federal regulatory approval for mergers.
Dive Insight:
Glenview's actions have raised questions about the hedge fund's views on the healthcare industry overall, given its broad exits that have "the smell of a panic-type of move,” William Meade of investor consulting firm Billionaire's Portfolio told Modern Healthcare. Meade suggested the move is likely based on risk management.
The fund had betted on the ACA being good news for healthcare through the infusion of more covered patients and heavily bought up healthcare stocks before the health law took effect. However, healthcare stocks saw rougher times in 2015, with Glenview taking hits on funds in late 2015 and early 2016, Modern Healthcare noted.
More questions abound regarding the matter of the pending mergers of Aetna with Humana and Anthem with Cigna. Glenview reduced its holdings in all four but still has $3.1 billion invested in them overall, suggesting Robbins is less optimistic at this time that the merders will get the green light.
“Because of the current environment—there's been so many failed mergers lately—I just have to believe he's not really optimistic that these mergers will occur,” Meade told Modern Healthcare.