This hedge fund crushed the competition in 2015

A biotech-focused hedge fund has posted some astonishing performance numbers in what has been an underwhelming year for the average hedge fund.

Perceptive Life Sciences Offshore Fund, a $1.14 hedge fund that makes investments in biotech and pharmaceutical companies, delivered a 27.87% return through December 11, according to data from HSBC.

Perceptive ranked as one of the top five performing hedge funds, according to the data.

Hedge funds have fallen 3.72% this year on average, according to data from Hedge Fund Research. There have been numerous highly-publicized hedge fund closures and redemptions this year, and many of the industry’s titans have stumbled.

Hedge funds focused on the biotech sector, in contrast, have had a better time of it. The average hedge fund that invests primarily in biotech stocks is up 9.64% this year, the HSBC report shows.

Key investments

Perceptive, which was founded in 1999 by Joseph Edelman, has not only had a strong year in 2015, but it has posted annualized gains of 19.37% since its inception, according to the HSBC data.

According to Perceptive’s latest regulatory filing data, the fund’s largest investments include Amicus Therapeutics (up 12.9% YTD), Neurocrine Biosciences (up 138% YTD), and Retrophin (up 61% YTD), the biotech company founded by Martin Shkreli in 2011 that’s now suing him for alleged securities fraud.

The fund also makes private investments. One of those investments resulted in a big pay day earlier this month, New York Post’s Michelle Celarier reported. On December 17, AstraZeneca said it will pay $4 billion for a 55% stake in
Acerta Pharma, a biotech startup that focuses on treating leukemia.

Perceptive held an 8% stake in the company. According to the New York Post, Perceptive made twenty-times its initial stake that it bought for $21.5 million.

We’ve reached out to the fund’s investor relations for an update on performance.

Deep roots in biotech

Edelman’s roots in biochemistry run deep. His late father Isidore “Izzy” Edelman was a renowned scientist. Izzy was a professor emeritus of biochemistry and molecular biophysics at Columbia’s College of Physicians & Surgeons where he spent 26 years.

Edelman began his career on Wall Street in 1987 as biotechnology analyst at brokerage firm Labe, Simpson & Company. In 1990, he moved to Prudential Securities as the senior biotech analyst and stayed there for the next four years.

In 1994, he transitioned to the buyside, joining Paramount Capital Asset Management where he ran The Aries Funds until 1998.

Edelman graduated magna cum laude with a degree in psychology from the University of California San Diego. He earned his MBA from NYU.

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