Managers hope a new FDA chief and more drug approvals will
provide a much-needed turnaround
Drug and biotech companies may be on the hunt
for lifesaving cures, but until very recently, they have been
bitter medicine for hedge fund managers. In fact, at least five
biotech-driven hedge funds have pulled the plug this year, the
latest being Caxton Health Care Trading, a $417 million fund
that decided to close its doors last month after netting 1.46%
annual returns since it opened nearly two years ago.
Reflecting the malaise of other equity investors, many
biotech funds struggled through the first half but rebounded in
August, giving a composite list compiled by Absolute Return a
7.04% showing year-to-date, slightly besting Absolute Return's
Composite Index, which rose 6.52% during the same time. But in
July, biotech was trailing Absolute Return's Composite by more
than 2%, so the sudden reversal has emboldened some...