Baker Brothers
Anyone know anything about Baker Brothers? Culture, compensation, etc. Interested to hear thoughts about them.
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Pharma / biotech focused (believe long-only) shop. Not sure of culture and comp but know that their returns performance has been ridiculously good over a very long period of time. Would be surprised if comp is not top of street.
They also seem like one of the most secretive firms on the street, don't even have a website, no one listed on linkedin...
Anyone have an update on performance this year. Seems like most biotech-focused funds are down at least 20% YTD. It's kind of insane you never hear about Baker Bro's returns given they were a $30B fund not too long ago.......
Assuming they got smoked during downturn as well but they are legends.
Why are they seen as any different than Tiger Global or ARKK? Their drawdown looks probably worse. I don’t know them well maybe I’m missing something
Because making money in tech tends to be just high-beta + avoiding blowups, whereas biotech (measured by XBI) is low/moving beta by its own nature. ARKK/ARKG is a joke and shouldn't be compared to real biotech investors.
They (Baker) have been significantly above average at calling the outcomes of clinical trial events. It's also possible Baker had a limited net exposure and wasn't actually impacted as badly as others. But you don't pay them to outperform in environments like these. You pay them to call the trial readouts better than the next guy.
The past couple years was easy to pick on if you're evaluating biotech investors, especially if they're net long, but it's misleading because the correlation between biotech and everything moves a lot. XBI was selling off long before everything else, for example, and it sold off again because it became correlated with everything else when rates went up (it is a rate sensitive sector for sure).
At the FoF level, they are significantly different products. You'd probably want both Baker and Tiger in your fund of funds over the long run, and you'd be more upset with Tiger right now than Baker unless Baker's hit rate into catalysts was shitty over the past 12 months.
My snark may have been unwarranted, I don’t know biotech that well or know the space. My main pt was XBI was as bubbling as speculative tech so I think we have to handicap the perf on the up cycle by the drawdown - on this site I think people give too much credit to the funds long secular trends. That said I’ve written elsewhere that you should judge tech guys vs their mandate and I don’t know enough about their track record to speak to nuance. Retract my negativity, we’ll see when the dust settles
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