Kaiser Permanente is looking to sell billions of dollars of holdings in private-equity funds due to cash constraints, according to a report.
Kaiser has been working with investment bank Jefferies Financial Group to sell up to $3.5 billion of stakes to secondary buyers, the Wall Street Journal reported Sunday, citing several unnamed people involved with secondary deals.
Related: Kaiser Permanente lays off more IT, administrative employees
The nonprofit health system is expected to sell off another similarly sized collection later this year, the report said.
Kaiser called the report inaccurate and said its investment decisions are based on regular reviews of its portfolio. “”None of our decisions have been driven by liquidity needs; we maintain liquidity that is appropriate for a AA- rated organization,” Kaiser said in an emailed statement.
Oakland, California-based Kaiser — one of the largest investors in private markets, which include investments into assets that are not publicly traded — operates 40 hospitals and more than 600 medical offices across eight states. Its health plan has more than 12.5 million members.
Kaiser and its related entities held nearly $100 billion of investments at the end of 2022, most of which were made through its pension system. Illiquid alternative assets, which can include private equity, real estate and infrastructure investments, made up about 57% of Kaiser's investment portfolio at that time, according to the report.
Kaiser recently formed a nonprofit, Risant Health, to acquire health systems and create a national network for value-based care. It acquired its first system, Danville, Pennsylvania-based Geisinger Health, on March 31.
On Friday, Kaiser reported $7.4 billion in first-quarter net income, including a $4.6 billion boost from the Geisinger acquisition, compared with $1.2 billion in net income in the year-ago period. Operating revenue exceeded $27 billion in the first quarter.
