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The Wire

Nov. 3, 2021

Investor group buys majority stake in Centene's USMM, MiddleGround doubles down on auto-industry investments, PE firms make hybrid return to office

 

Good morning, readers!

 

Not to claim this as “value-based care week” on the heels of my admittedly long (but hopefully enlightening) read, but more than one investor featured in my recent coverage just unveiled yet another unique partnership underscoring one of the next frontiers around this theme.   

 

Rubicon Founders; Valtruis, a Welsh, Carson, Anderson & Stowe company; Oak HC/FT; and HLM Venture Partners have joined hands to acquire a majority stake in US Medical Management (USMM) from Centene. Centene will retain a minority investment, according to a Wednesday morning announcement. Financial terms were not disclosed, but USMM generates around $200 million of revenue today, one source familiar with the company told me.

 

USMM, whose family of companies are dedicated to providing high-quality, coordinated healthcare in the home, encompasses the largest physician house calls business in the country (which is largely fee-for-service) as well as participates in the Medicare Shared Savings Program. The partnership is notable for more than one reason, Adam Boehler, founder of Rubicon Founders, told me: “No. 1, you have a group of investors that know this convergence of fee-for-service to value cold. No. 2, not only are we going to convert this business to value, but as part of this we are going to expand it out into all of Centene and WellCare.” Added WCAS General Partner David Caluori: “This is a perfect example of...

 

Read the full wire commentary on PE Hub... 

 

That’s it for me! Have a great week ahead, and as always, write to me at [email protected] with any tips, gossip or feedback. 

 

Also of note (may require subscriptions)

Outperform: Private equity giant KKR, which recently announced a major leadership transition, shot past the initial target set for its 13th flagship buyout offering. KKR North America Fund XIII brought in nearly $16.8 billion as of the end of September, the firm said in its third-quarter financial results. That puts the vehicle well ahead of a $14 billion target, reported earlier this year by Buyouts and other sources. Read more on Buyouts.

 

Private wealth: Private equity giant KKR expects between 30 and 50 percent of new capital raised over the next few years to come from the private wealth channel, said the firm’s new co-chief executive Scott Nuttall. Nuttall noted on the the firm’s third-quarter earnings call Tuesday that the private wealth channel is an area of strategic focus, alongside perpetual and long-dated capital and its insurance business. Read more on Private Equity International.