Squadra calls for changes at Hapvida: "One of the biggest value destructions in stock market history"

In a harsh letter sent to Hapvida, the asset manager Squadra Investimentos escalated its criticism of the company, in which it holds a 6.98% stake.

In the letter, sent this Wednesday, April 1st, and published on its website , Squadra requests the adoption of multiple voting in the election of the Board of Directors scheduled for April 30th. The asset manager also nominated three individuals to compete for positions on the board: Tania Sztamfater Chocolat, Bruno Magalhães e Silva, and Eduardo Parente Menezes.

According to Squadra's letter, all three possess experience in capital allocation, restructuring, and governance, skills considered essential for the company at this time.

The move comes after months of attempts at dialogue with management, which, according to Squadra, have yielded no progress. "We understand it to be our fiduciary duty to reiterate the reasons why we consider changes to the composition of the Board of Directors to be crucial," reads an excerpt from the letter.

The fund manager offers a critical analysis of Hapvida's management since its IPO in 2018. The document cites a "series of misguided strategic, operational, capital allocation, and governance decisions" that allegedly led to one of the biggest value destructions in the recent history of the Brazilian stock exchange.

Among the points highlighted are the fact that the stock has fallen 85% since its IPO, while the Ibovespa has risen 120%, and the fact that the merger with Notre Dame Intermédica is said to have destroyed approximately R$ 80 billion in market value.

"Throughout this period, a series of misguided strategic, operational, capital allocation, and governance decisions were observed which, in our view, were decisive in the drastic reduction of the Company's share value, one of the greatest value destructions in the history of the Brazilian capital market," the asset manager writes.

Squadra also highlights that Hapvida lost 238,000 beneficiaries in the Southeast and South regions in 2025, despite the market growing by 792,000 lives during that period, and that leverage increased, while debenture spreads reached CDI+9%.

Guilherme Aché's asset management firm also criticizes the company for not recognizing impairment of R$ 44 billion in goodwill, despite operational deterioration.

In the letter, Squadra also points out governance flaws, such as the introduction of a poison pill that limits minority shareholders to 20% of the capital — a measure approved with votes from the controlling block — and compensation considered excessive for the CEO and the Board.

"In the accumulated fiscal years of 2023 and 2024, due to the recognition of this package, the total compensation of the highest-paid executive was approximately R$ 110 million, a figure that earned him mentions in multiple reports as one of the highest-paid CEOs in Brazil," writes Squadra.

Regarding the approved compensation for 2026, Squadra also raises criticisms. "The total projected compensation of R$ 57 million for the Board of Directors in 2026 represents approximately 20% of the profit estimate from sell-side analyst consensus."

The letter dedicates a chapter to the proposal that will be presented at this year's Ordinary General Assembly. According to Squadra, the administration's plan foresees the full re-election of the nine current board members and a reduction in the number of independent members.

The asset manager also argues that the Board should evaluate strategic alternatives, including the sale of assets in the Southeast and South regions. According to Squadra, the turnaround in these regions has not yielded concrete results and carries a high execution risk.

According to the letter, potential divestments could significantly reduce leverage, rebalance regulatory capital, allow for the future resumption of dividends, focus management on the group's most profitable operations, and create significant value for shareholders.

“We believe that Hapvida possesses assets that, in the hands of operators with focus and specific skills, present a concrete opportunity for recovery,” the asset manager writes.

Hapvida is valued at R$ 5.2 billion. This year, its shares have fallen by 28%. Over the past 12 months, the devaluation is 68.4%.