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KKR’s investors should be asking questions around Envision Healthcare bankruptcy risk

January 6, 2023

With Envision Healthcare at risk for bankruptcy, limited partners invested with KKR should be asking questions

In 2018, KKR’s Americas Fund XII acquired Envision Healthcare[1] for $9.9 billion via a leveraged buyout[2] that used about $7 billion in debt[3]—approximately 70.7% of the deal value.

Over four years later, Envision Healthcare is now at risk of a major restructuring or bankruptcy. In September 2022, Moody’s Investor Service downgraded Envision to its lowest corporate credit rating.[4]

See our full report—“Envision Healthcare: A Private Equity Case Study.”

Limited partners invested in KKR should be asking questions regarding how under KKR’s ownership, Envision has transformed from a profitable company and desirable acquisition target purchased in one of the largest leveraged buyouts since the financial crisis to a financially distressed one at high risk for bankruptcy and facing reputational fallout from its business practices.

Of the 193 North American-based healthcare companies that Moody’s rates, Envision has the highest debt load ($7.9 billion) of those backed by private equity, and the second highest debt load overall.[5]

As of January 6, 2023, Envision’s $5.3 billion first-lien term loan due 2025 is trading at 42 cents on the dollar, down from a high of 82 cents in February last year. Its 8.75% senior unsecured note due 2026 is trading at 28 cents on the dollar.[6]

At the time of KKR’s 2018 acquisition, Envision was already facing mounting scrutiny for its role in America’s surprise medical billing problem.[7] The billions of dollars in debt loaded onto Envision have become a major liability as new regulations against surprise billing (the No Surprises Act) have gone into effect, limiting Envision’s ability to successfully engage in lucrative out-of-network billing.[8]

Envision is also embroiled in litigation with UnitedHealthcare over its billing practices,[9] and it is facing litigation with the American Academy of Emergency Medicine Physician Group, which is alleging that Envision’s business practices violate California’s ban on the corporate practice of medicine.[10]

Moody’s September 2022 rating report also cited high labor costs and Envision’s out-of-network status with UnitedHealthcare as factors contributing to its lowest rating. [11] Overall, Envision’s heavy debt load has rendered it vulnerable as the regulatory landscape and market conditions have shifted out of its favor.

Back in May 2020, WSJ questioned how a private equity firm like KKR “failed to understand the risks of investing in a highly regulated industry with powerful stakeholders.”[12]

Limited partners invested in Americas Fund XII should be engaging with KKR regarding its investment in Envision, asking the following questions:

  • To what extent did Envision’s financial performance rely on surprise billing at the time of KKR’s acquisition?
  • How did KKR fail to anticipate and plan for the regulatory risks with this investment?
  • How have legislative efforts to curb surprise billing impacted Envision’s financial viability?
  • How much money did KKR and Envision spend opposing surprise medical billing legislation and regulations at the federal and state levels?
  • How is KKR managing litigation risks for Envision?
  • How is KKR managing regulatory risk in its healthcare investments, more broadly?
  • How does KKR’s ownership of Envision fit within the firm’s ESG framework?
  • What steps is KKR taking to mitigate the impacts of a potential restructuring or bankruptcy for Envision’s employees?

For further information on Envision, see PESP’s December 2022 report on Envision here.



List of Limited Partners invested in KKR Americas Fund XII

Source: PitchBook

The table below contains a list of select limited partners who are original investors in KKR’s Americas Fund XII, which is the fund that acquired Envision Healthcare in 2018.[13] The types of limited partners included in the list are public pensions, corporate pensions, foundations, and government agencies. The data was sourced from PitchBook, except where otherwise noted.


Limited PartnerType


(if available)

Almenni Pension FundCorporate Pension (Iceland)
Birta lífeyrissjóðurCorporate Pension (Iceland)$6.21M
California Public Employees’ Retirement SystemPublic Pension Fund$750.00M
California State Teachers’ Retirement SystemPublic Pension Fund$250.00M
California State University FoundationEndowment
Canada Pension Plan Investment BoardPublic Pension Fund$300.00M
Chicago Teachers’ Pension FundPublic Pension Fund$25.00M
Citigroup Pension PlanCorporate Pension
Credit Suisse Anlagenstiftung 2. SäuleFoundation$8.00M
Dominion Energy Ohio Union Retiree Health and Welfare PlanCorporate Pension
Dominion Energy Retiree Health and Welfare PlanCorporate Pension
Dominion Resources Defined Benefit Master TrustCorporate Pension
Dominion Transmission and Hope Union Retiree Health and Welfare PlanCorporate Pension
Emerson Electric Company Retirement PlanCorporate Pension
Festa lífeyrissjóðurCorporate Pension (Iceland)$5.00M
Gemeinschaftsstiftung der Zellweger LuwaFoundation (Switzerland)$5.00M
Gildi LifeyrissjodurPublic Pension Fund (Iceland)$31.32M
Icelandic State Pension FundsPublic Pension Fund (Iceland)$14.40M
Kentucky Teachers Medical Health Insurance TrustPublic Pension Fund$10.00M
Kentucky Teachers’ Retirement SystemPublic Pension Fund$50.00M
Koret FoundationFoundation$2.50M
Maine Public Employees Retirement SystemPublic Pension Fund$60.00M
Manton FoundationFoundation$10.00M
Michigan Department of TreasuryGovernment Agency$200.00M
Minnesota State Board of InvestmentPublic Pension Fund$200.00M
New York City Board of Education Retirement SystemPublic Pension Fund $16.00M[14]
New York City Employees’ Retirement SystemPublic Pension Fund$158.00M
New York City Fire Department Pension FundPublic Pension Fund $28.00M[15]
New York City Police Pension FundPublic Pension Fund$75.00M
New York State Common Retirement FundPublic Pension Fund$600.00M
Oregon Investment CouncilPublic Pension Fund$500.00M
Oregon Public Employees Retirement SystemPublic Pension Fund$500.00M
Pensions Caixa 30Corporate Pension$20.00M
Personalvorsorgestiftung der Ärzte und TierärzteUnion Pension Fund (Switzerland)$5.50M
Public Employee Retirement System of IdahoPublic Pension Fund$50.00M
Raytheon Technologies Corporation Employees Retirement PlanCorporate Pension
Richard King Mellon FoundationFoundation
Stafir lífeyrissjóðurCorporate Pension$5.00M
Stapi LífeyrissjóðurPublic Pension Fund$12.53M
State of Michigan Retirement SystemsPublic Pension Fund $200.00M[16]
Teachers’ Retirement System of the City of New YorkPublic Pension Fund$223.00M
TfL Pension FundPublic Pension Fund (United Kingdom)$22.00M
Thrivent Financial for Lutherans Individual Pension Account PlanCorporate Pension
Transamerica Pension PlanCorporate Pension
Washington State Investment BoardPublic Pension Fund$750.00M



[1] “Envision Healthcare to Be Acquired by KKR for $46.00 Per Share in All-Cash Transaction,” June 11, 2018.

[2] Stinnet, Joel. “Envision Healthcare Completes $9.9 Billion Sale to KKR.” Nashville Business Journal. October, 11, 2018. Accessed October 13, 2022.

[3] Ronalds-Hannon, Eliza, and Davide Scigliuzzo. “The Debt Deal That Shows How Ugly Things Are Getting for Lenders.” Bloomberg.Com, October 5, 2022.

[4] Moody’s Investor Service. “Moody’s Downgrades Envision Healthcare Corporation to C, Outlook Stable.”, September 21, 2022.–PR_469479.

[5] O’Grady, Eileen. “Almost 90% of Most Distressed Healthcare Companies Are Owned by PE Firms.” Private Equity Stakeholder Project (blog), January 3, 2023.; Landi, Heather. “Healthcare Companies’ Default Risk Steadily Rising, with Most Owned by Private Equity: Moody’s.” Fierce Healthcare, December 12, 2022, sec. Fierce Healthcare Homepage, Health Tech, Payers, Providers, Hospitals, Practices.

[6] Bloomberg Terminal, accessed January 6, 2023.

[7] Creswell, Julie, Reed Abelson, and Margot Sanger-Katz. “The Company Behind Many Surprise Emergency Room Bills.” The New York Times, July 24, 2017, sec. The Upshot.; U.S. Senate Committee on Homeland Security & Governmental Affairs. “Rising Emergency Room Costs in Missouri Is Focus of McCaskill Inquiry,” September 25, 2017.; Kincaid, Ellie. “Envision Healthcare Infiltrated America’s ERs. Now It’s Facing A Backlash.” Forbes, May 15, 2018, sec. Pharma & Healthcare.

[8] Butt, Rachel, and Paula Seligson. “Envision Healthcare Losses Deepen on Wage Pressures, Contract Fight.” Bloomberg.Com, August 23, 2022.; Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-of-Network Billing for Emergency Care in the United States.” Cambridge, MA: National Bureau of Economic Research, July 2017.

[9] Liss, Samantha. “UnitedHealthcare Fires Back, Sues Envision for Allegedly Exaggerating Patient Claims.” Healthcare Dive, September 12, 2022.

[10] Wolfson, Bernard J. “ER Doctors Call Private Equity Staffing Practices Illegal and Seek to Ban Them.” Kaiser Health News (blog), December 22, 2022.

[11] Moody’s Investor Service. “Moody’s Downgrades Envision Healthcare Corporation to C, Outlook Stable.”, September 21, 2022.–PR_469479.

[12] Gottfried, Miriam. “Ill-Timed Health-Care Buyouts Bruise KKR and Blackstone.” WSJ, May 28, 2020, sec. Markets.

[13] “Envision Healthcare to Be Acquired by KKR for $46.00 Per Share in All-Cash Transaction,” June 11, 2018.

[14] Pg. 51, “NYC Board of Education Retirement System Investment Meeting – June 15, 2022.” June 15, 2022.

[15] Pg. 55, “New York City Fire Department Pension Fund as of June 30, 2022.” June 30, 2022.

[16] Tozzi, John. “How Private Equity Keeps States Invested in Medical Billing Practices They’ve Banned.” Bloomberg.Com, July 3, 2018.

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