Tuesday, July 5, 2011

Will Nancy-Ann DeParle Profit from CareMore Sale?

President Obama's Health Czar Nancy-Ann DeParle worked as Managing Director for CCMP Capital Partners, a private equity underwriter (PEU) with a number of health care investments.  CCMP will sell CareMore to giant health insurer WellPoint for $800 million, earning five times its original investment.

Nancy-Ann DeParle helped craft the deal, then served on CareMore's board from March 2006 until March 2009.  Her financial disclosure form is silent on any equity stake in CareMore.  The filing shows her CCMP salary and bonus at $1 million. Her form states under "agreements and arrangements:"

CCMP - I will keep my 401(k) with CCMP.  Neither CCMP nor I will make any future contributions to the account.
It appears to be invested in various mutual funds.  There is no sign her retirement is invested in CCMP funds.

PEU's frequently have managing directors investing personally in deals, yet DeParle's disclosure form shows no stake in CareMore, Legacy Health Partners or Noble Environmental Partners.  It does reveal a piddling stake ($15,001 to $50,000) in CCP/JPMP Friends.  (Click on the image below to make it larger.)

I expect more skin in CCMP from a Managing Director.  DeParle held $1 to $5 million in a cash account at Smith Barney.

As short to medium term investors, PEU's are all about the carry, the 20% they take from investment profits.  CCMP's profit on CareMore is $666 million, making the carry a sweet $133 million.  Will any carry find its way back to deal maker DeParle?

Irregardless, Nancy-Ann and company set up a for-profiteers paradise under health reform.  It's clear why DeParle called Big Pharma "our industry" during reform.  She personally had a stake in pharmaceutical companies.

I fail to see how investor greed will save America's imploding health care system.  It will make PEU's future gazillions.  DeParle set a fine table for her friends.

Update 7-7-11:  Florida Governor Rick Scott "took care" of his conflict of interest re:  Solantic stock by putting it in his wife's name.  This indicates have far the bar has fallen in declaring and managing conflicts.  Did Nancy-Ann do likewise with any CareMore holdings?  Are they under an immediate family member?  Will WellPoint cut a check to a DeParle in its CareMore buyout?

Update 7-10-11:  Bloomberg/BusinessWeek found the DeParle-Caremore connection.  They list her as director of CareMore Health Plan and CareMore Medical Enterprises.