The Jensen Investment Team Sells Position in UnitedHealth Group
June 2025
The Jensen Investment Team’s decision to sell UnitedHealth Group Inc (UNH) from the Jensen Quality Growth Strategy reflects a significant shift in the company’s risk profile. We originally purchased the company in 2014, an investment that was based on UNH’s diverse and defensible revenue streams, its essential role in U.S. healthcare delivery, a history of disciplined business execution, and long-term tailwinds from rising healthcare spending. Over more than a decade, the company delivered strong returns, expanding across insurance, care delivery and analytics.
However, several recent developments have undermined our conviction in the business’s quality and predictability. Most notably, the company experienced rising medical care costs in 2024 and 2025 that were well above expectations, calling into question its underwriting discipline and visibility into cost trends. At the same time, UNH is facing reputational and legal challenges, including allegations of Medicare fraud and a Department of Justice antitrust investigation related to its acquisition strategy, as well as abrupt management changes. The sudden withdrawal of 2025 financial guidance further raises concerns about transparency and near-term visibility.
Taken together, these issues suggest a potential erosion in the company’s competitive advantages and governance stability. While UNH remains a dominant player in healthcare, the combination of rising regulatory scrutiny, operational uncertainty and weakening financial clarity no longer aligns with our investment criteria focused on business quality, risk management and long-term earnings visibility.
We began monitoring these concerns over the past 12 to 18 months and reduced the Strategy’s UNH weighting by approximately 300 basis points during 2024, reflecting growing uncertainty around the business. The recent acceleration of negative developments — including rising medical costs, regulatory investigations and diminished financial visibility — ultimately led to our decision to fully exit the position. This move allows us to reallocate capital toward businesses with more stable outlooks, stronger governance and clearer alignment with our quality-focused mandate.
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here for a listing of the Quality Growth Strategy’s current holdings.
The company discussion is solely intended to illustrate the application of our investment approach and is not to be considered a recommendation by Jensen. The specific security identified is taken from a representative accounts of the Jensen Quality Growth Strategy and does not represent all of the securities purchased and sold for the Strategy. Our views expressed herein are subject to change and should not be construed as a recommendation or offer to buy or sell any security and are not designed or intended as a basis or determination for making any investment decision for any security. Our discussions should not be construed as an indication that an investment in a security has been or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of any security discussed herein.
Certain information contained in this material represents or is based upon forward-looking statements, which can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of a client account may differ materially from those reflected or contemplated in such forward-looking statements.
This information is current as of the date of this material and is subject to change at any time, based on market and other conditions.
Jensen Investment Management, Inc., is an investment adviser registered under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training. Although taken from reliable sources, Jensen cannot guarantee the accuracy of the information received from third parties.
© 2025 Jensen Investment Management
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