Larry Robbins’ Glenview Capital is attempting a shakeup at Health Management Associates Inc (NYSE:HMA). In an open letter to other shareholders of HMA, Robbins intimates that his firm has started a democratic process to elect eight highly qualified, independent directors to the company’s board of directors. Glenview Capital owns 14.6 percent of HMA and has been a shareholder for more than two years.
The $6.4 billion hedge fund has over $2 billion invested in the five largest hospitals in the U.S. and the letter stresses that Glenview has a long term bullish position in the sector. In the open letter, Robbins emphasizes that Glenview is a long term shareholder and is not an opportunist while detailing his other investments which have spanned over 9-10 years. Glenview said that despite of the best efforts from HMA’s executives, the company has failed to achieve its growth goals. The letter also criticizes the company for hiring several CEOs in the past 13 years. Previously Glenview has asked HMA to remove the poison pill plan saying that it had no intention to buy the company.
Health Management Associates Inc (NYSE:HMA) has underperformed its competitors over the last 10 years and has given unnecessary attention to acquisitions which have not helped in generating returns for its shareholders.
Best Performers of Glenview
The flagship fund Glenview Capital Partners, with over $2.8 billion under management, is up +28 percent through May of this year, according to a report from Lawrence Delevingne of Absolute Return. The main drivers of Q1 performance were Robbins’ successful bets in Life Technologies Corp. (NASDAQ:LIFE) and CIGNA Corporation (NYSE:CI), Computer Sciences Corporation (NYSE:CSC), Xerox Corporation (NYSE:XRX), BMC Software, Inc. (NASDAQ:BMC), URS Corp (NYSE:URS), Babcock & Wilcox Co (NYSE:BWC) and Rovi Corporation (NASDAQ:ROVI).
Robbins, while talking to AR, said that Glenview’s investments in General Motors Company (NYSE:GM), Computer Sciences Corporation (NYSE:CSC), Flextronics International Ltd. (NASDAQ:FLEX) and Meritor Inc (NYSE:MTOR) will benefit through the next year from event driven developments. He also said that Glenview has increased its position in pending allies ThermoFisher and Life Technologies Corp. (NASDAQ:LIFE), will which give it larger exposure to a great investment. He also said that the company has some of the strongest executives and directors he had come across.
Glenview also reopened its position in Walgreen Company (NYSE:WAG), Robbins said that the company is a low-risk investment and can achieve secular growth, however he did not expect the investment to generate exciting returns in the near term.
Glenview New Rule Higher Fees and Team Update
Glenview recently enacted a new rule which will allow investors t0 change their fee plan. The fund will charge a lower 0.5 percent management fee when it underperforms and a higher 30 percent incentive fee when it produces higher returns, in contrast to its previous 2 percent-20 percent fee plan Glenview said goodbye to three of its analysts, Adam Cho, Peter Hafner and Steve Smith while hiring a new industrials analyst from Carlyle Group, Logan Perez-Gurri, in Q1.