EcoR1 Capital, an up-and-coming hedge fund firm focused on biotechnology, is raising a venture capital fund, according to a regulatory filing.
The firm is seeking capital for the EcoR1 Venture Opportunity Offshore Fund, the filing shows. The minimum investment is $2 million.
EcoR1, founded by Oleg Nodelman in 2012, invests in biotech companies that are developing “promising new solutions for untreated diseases,” according to its website. The San Francisco-based hedge fund firm managed a little more than $1 billion at the end of last year, according to a regulatory filing.
After Nodelman was named a 2015 Hedge Fund Rising Star by Institutional Investor, his main fund produced a 13.1 percent return in 2016 and gained 52.6 percent in 2017, according to an investor in the fund.
Before founding EcoR1, Nodelman spent 11 years with BVF Partners, a biotech hedge fund firm. At BVF, he was involved in the entire investment process, including opportunity generation, due diligence, portfolio management, and trading, according to his bio on EcoR1’s website. Nodelman had previously worked in strategic consulting and organizational management at Mercer Management Consulting, now called Oliver Wyman.
This year, EcoR1 is up 9 percent after losing 3 percent in April, according to a source familiar with its results. EcoR1 was also profitable in 2018, the source said.
EcoR1 declined to comment.
The firm has been very active in the private markets. EcoR1 has made 39 private investments and exited from 20, according to Crunchbase.
The hedge fund firm already made at least six private investments this year, including two in May. Many of its investments are in the Series A and Series B financing rounds of companies, though one of its private investments this year was in the Series E round of Peloton Therapeutics.
Last week Peloton was planning to public, but one day before it was set to begin trading, Merck announced that it was buying Peloton for $1.05 billion in cash. Under the agreement, Peloton shareholders could receive another $1.15 billion if certain drug candidates reach future regulatory and sales milestones.
If Peloton had fetched $17 a share in the IPO, the high end of its anticipated range, the company would have been valued at $756 million, according to The Washington Post.
This month, EcoR1 participated in the Series B $120 million financing of AlloVir, which develops cell therapies focused on restoring natural immunities to life-threatening disease, according to an announcement by biotech company ElevateBio. EcoR1 also participated in the $150 million round of funding for ElevateBio, which recently added AlloVir to its portfolio of cell and gene therapy companies, according to MedCity News.
