it seems like they invest heavily before companies go private. would that assumption be correct?

 

Its been working for longer than that. RA had extremely poor to mediocre performance up until the last 6 years or so when they reorganized their strategy. When the funding dries up for the explosive IPOs we're seeing a lot of these funds are going to be hurt. Perceptive is more diversified and has a strong L/S book but the others (and I would include Deerfield here too) have exploited the private rounds quite aggressively. When these mature startups cannot go public then they will carry huge positions in illiquid private names.

I actually don't think the public markets book for RA is all that special. Orbimed is now huge and has investments across many funds and stages and I hesitate to even call them a L/S hedge fund anymore.

What I think is going to be very interesting are all the SPACs that are life science focused hunting for targets.

 

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