Stephen Hemsley, leader of giant UnitedHealth Group, for years has made private investments in healthcare startups, including firms that do business with—or compete against—UnitedHealth.
The investments, involving tens of millions of dollars and stretching back at least seven years, weren’t announced by the healthcare companies that he was investing in, and UnitedHealth never told its shareholders about them.
Hemsley, 73, has been a dominant force at UnitedHealth for the past two decades. He began his second stint as chief executive last May, returning to help stabilize the finances of the behemoth he helped build. He previously served for more than a decade as CEO, then as chairman since 2017.
In 2019, while he was UnitedHealth board chairman, Hemsley founded an investment firm, Cloverfields Capital Group LP, which is registered with the Securities and Exchange Commission as an investment adviser. Cloverfields, which he still owns, has said in filings that it invests in publicly held companies such as elevator-maker Otis Worldwide.
But Cloverfields has a less-visible side, The Wall Street Journal found. Cloverfields Capital and entities affiliated with it have bought stakes in privately held healthcare startups. The investment targets spanned a range of healthcare interests, from a vaccine administration firm that did business with UnitedHealth to a provider of digital health services that offers a product that competes with it.
The private investments involving UnitedHealth’s chief create the potential for conflicts of interest, ethics specialists said.
Nearly every company in healthcare touches the business of UnitedHealth, a $450 billion health conglomerate that owns the nation’s largest insurer, a sprawling network of doctor groups, technology and healthcare-services units, and a pharmacy-benefit manager.
UnitedHealth said Hemsley abides by all of its disclosure and conflict-of-interest policies.
Board members of large public companies sometimes hold private investments in other companies in the same industries, particularly in the technology sector. Ethics experts said such conflicts can often be managed, typically through disclosure to and approval by fellow directors, and that some companies voluntarily disclose them to shareholders to ensure transparency.
UnitedHealth rival Humana, for example, has long disclosed board chairman Kurt Hilzinger’s role at a private-equity firm that invests in healthcare companies. That firm publicly lists the names of the healthcare companies in which it has invested.
In response to questions from the Journal, UnitedHealth said Cloverfields is a family office as well as an investment adviser, and that Hemsley “maintains a diversified portfolio of public and private investments, some of which are in the health care sector.” In the “vast majority” of cases, the company said, he owns 5% or less of these healthcare companies, and he doesn’t have a controlling interest in any of them.
After Hemsley resumed his CEO role last May, the company said, he “transferred all his personal ownership interests in health care-related companies to a newly established trust” and recused himself from corporate decisions related to those interests. It said Hemsley is prohibited from participating in decisions made by the trust’s independent trustees, which “aligns with established models for avoiding potential conflicts of interest.”
UnitedHealth hasn’t publicly disclosed anything about the private healthcare investments tied to Hemsley, or about the trust. It didn’t respond to a request to share trust documents or a question about whether the trust is “blind,” which would prevent Hemsley from knowing which assets were being bought or sold.
In one deal, there was discussion about keeping Hemsley’s involvement out of written communications. In a 2022 email reviewed by the Journal, a partner at investment firm Claritas Capital told colleagues that Hemsley, through his “personal entity” Cloverfields, was Claritas’s co-investor in a startup called Nexben and had invested $8 million in the deal.
The Claritas partner said that Hemsley’s name wasn’t to appear in writing, but could be shared verbally with other potential investors. Not long after that email, Cloverfields and Claritas executives joined Nexben’s board, SEC filings show.
Nexben provides technology to help employers fund employee health-insurance purchases. UnitedHealth insurance plans are included in a platform it offers for insurance brokers.
Other startups that received investments have products that compete with offerings from UnitedHealth. They include Solera Health, which connects patients to digital health solutions, and Monogram Health, which helps patients with chronic kidney disease and other conditions.
Claritas, Monogram, Nexben and Solera didn’t respond to requests for comment.
Hemsley’s stakes weren’t mentioned in startups’ news releases or other public materials. Cloverfields and Hemsley also aren’t named as investors in healthcare startups in well-known databases of venture-capital holdings such as PitchBook and Crunchbase.
The investments sometimes were made through Delaware-registered entities associated with Cloverfields, with names that were combinations of initials and numbers. The Journal identified some of the investments by speaking to executives and healthcare investors and reviewing internal company documents.
Dual interests
At the time Hemsley was board chairman and privately investing in small healthcare entities, UnitedHealth was on the lookout for healthcare investments. UnitedHealth’s venture-capital affiliate, Optum Ventures, took stakes in more than 60 small healthcare companies from 2018 to 2025, according to its website.
Directors of companies registered in Delaware, as UnitedHealth is, have a “duty of loyalty”—an obligation to put the company’s interests ahead of their own. A director who invests personally in a startup in the same industry without first clearing it with his company could be breaching that duty, legal experts say.
UnitedHealth has conflict-of-interest and related-person transactions policies that echo general corporate practices, requiring disclosure to the board and board approval for any investment in the healthcare industry by a director.
“Mr. Hemsley continues to comply fully with UnitedHealth Group’s conflict of interest and trading policies, as well as all applicable SEC and other regulatory requirements,” UnitedHealth said in the statement. The company said Hemsley had followed UnitedHealth disclosure policies.
Establishing a trust for Hemsley’s healthcare investments helps alleviate the potential conflicts of interest, said Douglas Chia, a corporate-governance consultant and a senior fellow at the Rutgers Center for Corporate Law and Governance. But Hemsley had the same conflicts before the trust was established, when he was chairman but not CEO, he said.
If UnitedHealth were a client, he said, he would advise it to voluntarily disclose the trust and the existence of Hemsley’s private healthcare investments.
In 2018, after Hemsley stepped down as CEO but remained chairman, he paid $10 million for a 1.6% stake in the Center for Autism and Related Disorders, or CARD, a company that provides therapy for autistic people, according to a later court filing.
The prior year, while Hemsley was still CEO of UnitedHealth, the company’s insurance unit had extended coverage of autism therapy to almost all its members enrolled in commercial plans. Autism advocates lauded the move as a breakthrough. CARD was a leading industry provider of such services.
When CARD sought bankruptcy protection in 2023, UnitedHealth entities appeared in court filings as having done business with CARD. Medicaid records also show that UnitedHealth’s insurance units paid CARD for tens of thousands of autism therapy sessions, many while Hemsley was an investor.
Veteran leader
Hemsley joined UnitedHealth in 1997 and became CEO in 2006 after his predecessor was ousted amid a stock-options backdating scandal. He oversaw the company’s growth into a diversified nationwide healthcare behemoth. He helped turn UnitedHealth into a Wall Street favorite, with growth fueled partly by a steady diet of acquisitions.
A former accountant known for his intense focus and discipline, Hemsley has a button-down style. Former executives said he typically didn’t send emails, preferring telephone calls and in-person meetings. Despite his high profile, he kept out of the public eye, largely limiting his appearances to quarterly earnings calls.
After he stepped down as CEO in 2017, Hemsley remained executive chairman for two years, during which he remained an employee. In November 2019, he became nonexecutive board chairman.
Over the years, he amassed a fortune in UnitedHealth stock, much of which he has sold, filings show. Hemsley is worth at least $990 million, not including some hard-to-value assets, according to wealth-intelligence firm Altrata.
Hemsley’s return last year as CEO came after UnitedHealth fell short of expected first-quarter earnings, causing its shares to plunge. He has promised a turnaround.
For his investing and charity work, Hemsley has used a series of entities with names that are variants of Cloverfields. The name comes from an estate built on Maryland’s Eastern Shore in the early years of the 18th century by Philemon Hemsley, a wealthy merchant and tobacco planter.
Hemsley has taken a keen interest in the ancestral home, funding and leading a nonprofit that bought and restored the 7,000-square-foot brick house. The logo of Cloverfields Capital features a silhouette of the house.
In 2018, Hemsley used an entity called Clover Fields Enterprises to make his investment in CARD, the autism-therapy company, according to a court document.
The following year, Hemsley started his SEC-registered advisory firm, Cloverfields Capital Group LP. According to its filings, it managed about $340 million at the end of 2024—the most recently reported year—on behalf of about 60 wealthy individuals and three charities.
In a year-end 2024 filing, Cloverfields listed stakes in publicly traded companies such as Berkshire Hathaway and Google parent Alphabet that accounted for nearly all of the money it said it managed for clients. The advisory firm said in filings that its strategies focus on public-equity investments.
UnitedHealth said Cloverfields is a “family office firm,” in addition to its disclosed role as an SEC-registered investment adviser. Hemsley’s personal investments aren’t owned or managed by the investment-adviser unit, the company said, and don’t need to be included in its disclosures.
UnitedHealth didn’t respond to requests for more detail about the setup of Cloverfields, but said Hemsley doesn’t currently have day-to-day operational responsibilities there. A Cloverfields official didn’t respond to requests for comment.
Documents reviewed by the Journal showed that some Cloverfields staffers performed functions akin to those of a venture-capital operation, including researching and investing in healthcare startups.
In one instance, Cloverfields executive Jamison Rice signed a 2024 term sheet for the purchase of a stake in a healthcare startup, which stated that the purchaser would be Cloverfields Capital Group or an affiliate, according to documents reviewed by the Journal.
That purchase was done through one of the Delaware-registered entities associated with Cloverfields, according to the documents. These entities typically followed the same naming convention: The letters CF or CFCG (for Cloverfields Capital Group) followed by initials signifying the company being invested in and the year the investment was made, the Journal found.
An investment in Monogram Health was made by CFCG-MGH 23 Holdings, while a stake in Solera was purchased through CF-SOL 23 Holdings, according to the documents reviewed by the Journal.
The chief compliance officer named in Cloverfields Capital Group LP’s SEC filings signed corporate documents for some of the Delaware entities. Rice and the compliance officer didn’t respond to requests for comment.
Cloverfields has cashed out of at least one investment, in Orlando-based VaxCare, which helps doctor practices and hospitals manage vaccine offerings. VaxCare has accepted UnitedHealth’s insurance for its vaccination services, according to online postings by VaxCare and public-health agencies.
Private-equity firm Blackstone acquired most of VaxCare last year. A VaxCare representative said: “Cloverfields exited its investment in VaxCare in June 2025.”
Cloverfields has retained other healthcare-startup investments into recent months. According to a document dated in September and reviewed by the Journal, Cloverfields held a stake in Tango, a Phoenix-based firm that helps health insurers manage home healthcare for their members. A spokesman for Tango declined to comment.
In this case, Hemsley’s two roles—as UnitedHealth CEO and healthcare investor—appeared to overlap. UnitedHealth had acquired two companies that held stakes in Tango, according to the document, so the healthcare giant was a shareholder as well.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.