Farallon Capital Management is the latest hedge fund firm to launch a new fund focused on the health care industry.
The San Francisco-based firm has raised $335 million for Farallon Healthcare Partners, according to a regulatory filing.
The firm declined to comment.
The launch follows last month’s news that Miura Global Management was launching the Miura Global Healthcare Opportunities Fund.
Likewise on June 15 Magnetar Capital said it is raising money for a new hedge fund, Magnetar Healthcare Fund Ltd.
As II has often reported, health care funds have been among the top performing hedge funds over the past few years. However, many of them have been struggling this year, with several still reporting losses for the first half of the year.
Through Friday the SPDR S&P Biotech ETF was down nearly 11 percent, the NYSE Arca Biotech index was down 1.4 percent, and the NYSE Arca Pharma index was up 9 percent. The S&P 500 was up 15.2 percent over the same period.
The underperformance of the majority of health-care funds and several major indices suggest this could be a good time to launch a new health-care fund.
Farallon was founded by Thomas Steyer in 1986 to invest in merger arbitrage. Today it is headed by Andrew Spokes.
Farallon currently manages $30.5 billion in hedge fund assets and $35 billion altogether, according to a person familiar with the firm.
Its strategies emphasize credit investments, long/short equity, merger arbitrage, risk arbitrage, real estate, and direct investments, according to the firm’s website.
In its annual ADV filing, Farallon singles out health care among other strategies, pointing out that it has invested in health care and medical technology companies, including biotechnology and pharmaceutical companies, whether or not publicly traded. “Intense competition exists in the health care industry, which is often characterized by intensive development efforts and rapidly advancing technology,” it added. “Certain health care and medical technology related businesses may have a single product or research focus, and may be subject to rapidly changing technologies.”
At the end of the first quarter, three of Farallon’s seven largest U.S. common stock long positions were health care companies: IQVIA Holdings, which specializes in health information technology and clinical research; Aon Plc, the Irish professional services firm serving health insurance plans, among others; and medical device maker Boston Scientific.
