Greenlight Masters, the fund of funds operated by David Einhorn’s Greenlight Capital, is enjoying booming returns from one of the funds it seeded earlier this year. EcoR1 Capital is a biotechnology-focused fund that has gained a brilliant 62.2% YTD through November, according to data from Simone Foxman of Bloomberg News.
Greenlight Masters gains from EcoR1 investment
Greenlight Masters had invested in EcoR1 at the beginning of this year. In the first half Masters’ investment in EcoR1 was up by 13.3%, making it the FoF’s third best performer for the period. The fund currently manages $206 million.
Chart via Bloomberg Briefs
The long-biased biotech fund was launched by Oleg Nodelman last year. Nodelman is of the opinion that a lot of good healthcare companies with strong balance sheets sold off in the March/April period and were therefore a great investment opportunity. In his second quarter letter, Nodelman noted,
“There are two states of being that are characterized by coexistence of contradictory and incompatible elements, schizophrenia and investing in biotechnology companies…
We have found an opportunity set of individual, fundamentally driven companies all with a margin of safety and significant upside potential amidst a sector and a market that we continue to view as overheated and unfettered by risk.”
In an email to Bloomberg, Nodelman said that there are a previously unseen number of opportunities to invest in the biotech sector. He noted the advancement in biotechnology research and a favorable environment for M&A activity as major reasons for the growth. EcoR1 Capital has positions in Sage Therapeutics Inc., Receptos Inc. and Assembly Biosciences Inc.
Healthcare-focused hedge funds make waves this year
A number of healthcare stocks and hedge funds who focus on them have enjoyed good returns this year. We mentioned a few of the best performing names in the sector earlier. Bloomberg’s list of top ten hedge funds in 2014 features four names from healthcare-focused funds. The second best performer in the list is also a biotech hedge fund by the name of venBIO Select Fund that manages $182 million and is up 61.8% YTD.
In the top ten list, Krensavage Partners is at No.5 spot with a 34% return. Krensavage Partners managed to gain with its long bets in Forest Laboratories Inc which acquired Furiex Pharmaceuticals Inc. Longwood Capital, which manages $158 million, is up 29.4% in the same period. The biggest moneymakers in Longwood’s portfolio have been Lion Biotechnologies Inc. and Cellectis.
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