TPG welcomes former WellPoint team

Leonard Schaeffer and his team from WellPoint will advise the firm on opportunities in the healthcare sector, having taken America’s largest benefits provider from ‘mess’ to ‘powerhouse’.

Fort Worth, Texas-based Texas Pacific Group has hired Leonard Schaeffer, 60, Thomas Geiser, 55, Robert Glaser, 47 and William Palmer, 44, as senior advisors to the firm.

The four men are former senior executives from WellPoint Inc., the largest publicly traded commercial health benefits company in terms of membership in the United States. Schaeffer, who served as CEO at WellPoint, will use the experience of his 30-year career in the healthcare industry to advise the firm of opportunities in the healthcare services sector.

“Leonard is an incredibly accomplished executive,” said TPG partner Jonathan Coslet. “When he came to WellPoint it was a real mess. He and his team built it into a real powerhouse.”

WellPoint eventually performed so well that it merged with Anthem Inc. in 2004. A recent study by the American Medical Association said that in California, WellPoint now has 50 percent or more of the PPO market in 15 of the 27 metropolitan areas surveyed.

TPG has been actively involved in investing in the healthcare sector since its inception in 1993. The firm’s healthcare holdings include Oxford Health Plans, IASIS Healthcare and Quintiles Transnational. The firm has offices in San Francisco, London and Fort Worth and manages over $13 billion in assets. TPG also invests in the technology, retail and consumer products sectors. The firm typically bets on complicated sectors.

“Here at TPG we think one of the ways we can create better than average value is to take on challenges in industries that are undergoing a lot of change,” said Coslet. “When things are hard to understand, a lot of investors will say, ‘Gosh I can’t understand it, I can’t calibrate the risks, I’ll move on to something else.’ From our perspective, the world is too competitive for us to invest in something well understood.”

“Healthcare is going through dramatic change,” he continued. “Our objective is to have strong insight into those changes and make our investment calls around who the winners are and avoid vigorously the losers.”

Coslet added that the hires are not necessarily a sign that TPG plans to undertake a healthcare deal in the immediate future, and that it could be years until the firm pursues its next healthcare investment.