Glenview Capital Management, Dallas-based Tenet Healthcare's largest shareholder, has in recent years struggled to achieve success with investments in hospital stocks, reports The New York Times.
Here are four things to know.
1. The New York City-based hedge fund invested in hospital stocks following implementation of the ACA and initially achieved great success, according to the report. At the time, GCM saw the potential for hospitals to gain from a decline in the number of uninsured patients.
2. However, GCM experienced losses as some for-profit hospital chains reported weak earnings, and hospital operators continue to face challenges associated with uncertainty regarding the effects of the ACA, reports NYT. The report notes the ACA resulted in only a temporary influx in patient volume and that hospitals continue to see admissions decline, particularly as healthcare shifts more toward outpatient care.
3. GCM remains a Tenet shareholder, despite the fact the fund has lost about $150 million as a result of Tenet's stock falling by nearly three-quarters compared to three years ago, according to the report. Tenet ended the second quarter of 2017 with a net loss of $56 million, expanding its net loss from $44 million in the same period of 2016.
4. Meanwhile, two Tenet board members from GCM resigned effective Aug. 17, leaving open the possibility of an activist campaign at Tenet. Additionally, Tenet announced Aug. 31 it is replacing CEO Trevor Fetter and "refreshing" its board. Tenet also plans to divest eight hospitals in four U.S. markets, including Philadelphia, as well as nine facilities in the United Kingdom, to improve its financial picture.
Read the full report here.