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The Woman Behind the Turnaround of Senior Living REIT Ventas

In 1997 the then small senior living REIT Ventas was in trouble. It along with its former parent company, the nursing home chain Vencor, were being prosecuted under the False Claims Act for overcharging Medicare for its services and for failure to provide adequate care to its residents. The REIT had 10 employees, a billion dollars in debt coming due, and had just learned that its only tenant, Vencor, was filing for bankruptcy under the weight of the damages.

It was under this dark cloud that the company hired a new CEO. They chose Debra Cafaro, the daughter of an Italian father and a Lebanese mother. She is a self described “Tomboy” that loved sports growing up. She excelled in school and became one of the first co-eds at the University of Notre Dame in the mid-70s. She never studied business, opting instead to be a lawyer.

Eventually, Cafaro started working in Chicago under the tutelage of famous investor Sam Zell, who took three REITs public in the first part of the 1990s. This experience taught her a lot. “The last three years of my legal career I was functioning in a somewhat hybrid role, spending half of my time on the legal side and the other half on the business side of the transactions. I enjoyed that, but I wanted to do even more,” she said. 

She got her wish when she was chosen to run Ventas. Carfano went right to work settling the lawsuit (the two companies eventually paid $219 million) and was still able to raise money for the company’s acquisition spree. Her vision was to transition from low-end senior living facilities that catered to Medicare recipients, to high-end ones that attracted private payers. This move paid off. In 2009, Ventas joined the S&P 500. 

Since leading its turnaround Cafaro has helped Ventas become one of the premier names in senior living. The company is now a $23 billion company and Cafaro is the longest-serving female CEO of an S&P 500 company. She can boast a total return during her tenure of an incredible 2,373 percent. She has also been named one of the world’s best CEOs many times, a distinction shared with few other women. 

As a way to give back to her city of Pittsburgh for what she describes as a sports centric culture during her youth she eventually invested $25 million into the Pittsburgh Penguins. She often describes the role of CEO as a coach. You have to spend the time finding great players and empowering them to do what they do best, “Being a leader is really different.I keep trying to learn and get better every day and learn from my mistakes and listen to the people I care about.” 

Cafaro also praises the importance of adversity for its ability to teach, “Go through some difficult experiences. If you can live through them and learn from them, you have a much better chance of knowing what to do when the chips are down, and everyone else is freaking out.” Ultimately she has shown that she is the type of person you want on your team, one that can learn from her mistakes and doesn’t freak out, even if the chips are way down.

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