Behind Centene's leadership overhaul is alleged pressure from the payer's $900 million financial backer, Politan Capital Management, which is led by activist investor Quentin Koffey.
Mr. Koffey has a history of using his capital leverage to drive change at companies he supports in an effort to spur business growth.
Here's how Centene fits into Mr. Koffey's track record:
- While at D.E. Shaw & Co., Mr. Koffey's first major move was a 2017 effort to encourage natural gas company EQT Corporation to expand its board and restructure its business on the heels of its acquisition of Rice Energy, according to the St. Louis Post-Dispatch. Within two years, EQT segmented its businesses and revised its board after increased pressure from other investors.
- Following his influence at EQT, Mr. Koffey eyeballed agribusiness company Bunge, which he claimed was similarly undervalued in the market, according to the Post-Dispatch. His efforts produced four new board seats and the eventual appointment of a firm-approved CEO, as well as a heightened company focus on less risky business directives.
- Finally, Mr. Koffey swayed home improvement retailer Lowe's to replace three board seats and its CEO.
- At Centene, Politan's agreement with the payer has allegedly led to the retirement of 25-year CEO Michael Neidorff and six board members over time, according to the Post-Dispatch. Politan encouraged two appointees and is championing an unnamed third appointment.
- Radhakrishnan Gopalan, a Washington University finance professor, told the Post-Dispatch that Politan scored a "huge win" over its impact on Centene's leadership, with the payer meeting plenty of the hedge fund's demands.