Hedge Funds

Biotech manager is on life support

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A struggling biotech hedge fund has offered to waive management fees in exchange for a longer lockup and higher performance fees after a year of sliding returns.

The arrangement has helped New York-based Mallette Capital Management keep onshore and offshore versions of Mallette Capital Biotech Fund open despite a 27% loss in November that dragged its full-year return down by 40%.

Biotech funds struggled last year due to a combination of circumstances. A leadership void at the Food and Drug Administration slowed approvals of new drug patents, and lawsuits continued to plague large pharmaceutical companies. The ensuing volatility helped drive