Does anyone have a sense for how beneficial a masters in biotech might be for a buyside role focusing on biotech? I'm looking to transition from consumer/tech hedge fund role to more biotech/healthcare focused and thinking about going back to school to improve my science background. Any thoughts?
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One thing I have noticed at "top" biotech-focused funds is that the folks on the investment/research team will be highly educated and pedigreed --> MD's, PhD's, PharmD's Master's in Biotechnology etc... In fact, if you do a quick linkedin search and some networking at these funds, many people will tell you that in order to be taken seriously they will at minimum want to see either some industry experience working at a large pharma company and/or solid science background with a minimum of Master's or higher (some publications would be nice). That being said I am sure at some smaller shops that "rule" may be more flexible and there might not be a need for more schooling.
It's extremely hard to get an interview at decent+ investment funds specializing in biotech without a doctorate at this point. It is not impossible, but it will require some exceptional pedigree outside of academia and/or reputation, connections, or luck to break-in otherwise.
The exception is Oleg at EcoR1, who goes out of his way to recruit non-doctorates to his investment team. His fund's performance is very good, and he has demonstrated the ability to readily adapt to market conditions and predict macro/fund flows better than most other PMs I've seen.
Having a doctorate may help you do diligence, but it's by far and away not necessary and certainly not sufficient to be a good biotech investor particularly in the public markets. Intellectual curiosity, grit/tenacity, and a genuine love for the markets and a desire to "win" go much further than having specialized knowledge in a very niche aspect of a biological pathway, in my opinion. The subject matter is not the value of a Ph.D. program, but the exercise of going very "deep" into one area and performing exhaustive research/being skeptical of everything you read is very valuable. Some people need a Ph.D. program to hone this skill, and some develop it naturally without it. At the end of the day, I'm indifferent on which path one chooses provided the outcome is the same.
I know many would disagree with this viewpoint, and then there is the entirely separate practical matter of filtering candidates based on degrees vs. interviewing all the candidates who don't have Ph.Ds/MDs.
FWIW this opinion is coming from someone who spent the time and money to go through a doctorate themselves...
Agree.
I actually think Ph.D.'s will have the tendency to anchor their thesis on irrelevant "scientific values and novelties" that in the end are packaged, undifferentiated tech, and general corporate speel. Having enough common sense to understand that the underlying mechanism is purely bogus and hypothetical and yet the company still goes on to burn investor money in a moon-shot registrational trial doesn't take a Ph.D. in my view, just requires experience to get burned a few times and learn from your mistakes.
Doctorates are beneficial for funds that are hybrid VC/PE/Public equitities, but not always required for public equity.
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Would highly recommend healthcare services or MedTech rather than biotech if you are transitioning from another sector and don't have a scientific background. Both are much less scientifically technical, with healthcare services focusing more on the systems such as payors and providers while MedTech is largely understanding clinical trials and statistics. Vast majority of those on the buyside in biotech have doctoral or medical degrees and among those who don't are former operators in the biotech space and those who started off in healthcare coverage at GS/MS/JPM with scientific undergrads and prestigious research. It will be very difficult to break in, let alone learn all the material you need to understand the space, at this point.
As someone who has worked/works on the buy-side focused on Biotech investing, I would echo the above sentiments. Many of the single manager HF focused on Biotech exclusively recruit PhD/MD types for their strong grasp of understanding the science, often out of graduate school.
As always, there are exceptions to the rule. I have a Bachelor’s degree in Biology, but my saving grace was that I was able to recall information from my undergrad classes / also conducted scientific research as an undergrad. One of my former colleagues has a Bachelors in Biology as well - but everyone else on the team had PhDs and MDs.
I would say that a Masters would increase looks that you would get from recruiters, but I don’t think you would get chosen over someone with a PhD or MD unless you could convincingly display your edge as an investor. On the flip side, having a PhD or MD doesn’t mean that you’re a good investor, as I’m sure you’re aware.
My recommendation? Take a few online open learning classes in Biology and the sciences (Coursera), perhaps try to work in a lab on weekends to understand what scientists do and how they do it, consider pivoting to work in Corp Dev for a pharma company before trying to get to the buy-side, or target a MM which often have multiple pods that focus on Healthcare/Biotech or have an allocation for it in the overall book. I would not pursue a Masters Degree unless you are willing to accept the reality that it may open a few doors for you - but may not necessarily guarantee you a role.
How much easier is it once you crack biotech buyside experience to get interviews at the SM specialists? In the role with a Pre-med background and Bachelors MS and deciding if I need to go to med school
Good question. From my experience, breaking in is the toughest part. It's much easier to get interviews once you have some time locked down. I would highly advise against going to Med School or getting a PhD to break into biotech investing.
Echo everything said already, but one suggestion might be to try to go to a generalist single manager fund with life sciences exposure - know someone who just left for a tiger cub doing healthcare investing with only a Bachelors in Neuroscience, but I imagine they’re more lax about background. At the end of the day, PhD isn’t required per se but it’s an uphill battle - don’t think Master’s is viewed that much better than Bachelor’s unless it’s from one of those special programs like JHU’s.
I know a kid who just started biotech investing out of undergrad at a HF, but he’s from a specialized program with tons of connections and exposure to the space.
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