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Perceptive Advisors

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Perceptive Advisors LLC
Company typePrivate
IndustryInvestment management
FoundedJuly 1999; 25 years ago (1999-07)
FounderJoseph Edelman
Headquarters51 Astor Place, New York City, New York, U.S.
Key people
Joseph Edelman (CEO)
ProductsHedge fund
Venture capital
Private equity
Private credit
AUMUS$9.7 billion (March 2024)
Number of employees
46 (March 2024)
Websitewww.perceptivelife.com
Footnotes / references
[1]

Perceptive Advisors ("Perceptive") is an American investment firm headquartered in New York City. It is focused on making public and private investments in the healthcare and biotechnology industries.

Background

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Perceptive Advisors was founded in July 1999 by Joseph Edelman. Edelman was previously a senior analyst at Aries Fund, a Paramount Capital Asset Management biotechnology hedge fund as well as a senior bBiotechnology analyst at Prudential Securities. His father was Isidore Edelman, a physician and researcher who became chair of the biochemistry and molecular biophysics department at Columbia University.[2][3][4]

The firm's flagship fund is called the Perceptive Life Sciences Fund. The firm takes a high risk approach to investing as the biotech sector is considered very volatile and it take years to develop a drug that could be rejected by the Food and Drug Administration. The firm tends to focus on small and midcap companies and it may overpay for securities if it there is still growth potential or undersell securities if they have further downside potential. To help mitigate day-to-day volatility, it has set a maximum daily loss allowance of five percent on long and short positions.[2]

In 2013, Perceptive launched its first credit fund, Perceptive Credit Opportunities Fund which raised $323 million. It would invest in vehicles such as direct secured loans, royalties and convertible structures for public and private companies.[2][4]

In August 2018, Institutional Investor stated that Perceptive since inception only had two years of negative returns. It had lost 10.33% in 2002 and 23.98% in 2008.[2]

In December 2019, Perceptive partnered with Xontogeny, a biotech startup accelerator to launch its first venture capital fund, Perceptive Xontogeny Venture Fund which raised $210 million. The fund would invest in biotech companies that were in preclinical development stage and help them move into the early clinical development stages. Prior to that Perceptive invested mainly in later-stage companies.[2][5][6]

At the end of 2022, it was reported that Perceptive posted losses of more than 40% during the last two years. These were considered the worst losses in the firm's history.[7][8][9]

SEC SPAC fine

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In September 2022, the U.S. Securities and Exchange Commission sued Perceptive for failing to disclose conflicts of interest related to special-purpose acquisition companies (SPACs). It claimed that in 2020, Perceptive advised its clients to invest in a series of SPACs without disclosing they were owned by both the firm's personnel and a private fund it had advised. Perceptive agreed to pay a $1.5 million fine to settle the case.[10][11][12]

References

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  1. ^ "Form ADV" (PDF). SEC.
  2. ^ a b c d e "The 41% Man". Institutional Investor. August 13, 2018. Retrieved April 11, 2023.
  3. ^ Roche, Julia La. "This hedge fund crushed the competition in 2015". Business Insider. Retrieved April 11, 2023.
  4. ^ a b Lawrence, Stacy (October 25, 2016). "Hedge fund Perceptive raises $323M life sciences debt fund". Fierce Biotech.
  5. ^ "Hedge Fund Firm Perceptive Advisors Raises First VC Fund". Institutional Investor. December 10, 2019. Retrieved April 11, 2023.
  6. ^ Al Idrus, Amirah (May 12, 2021). "Perceptive Advisors unveils $515M fund, its 2nd for early-stage biotechs". Fierce Biotech.
  7. ^ Chung, Gregory Zuckerman and Juliet (December 5, 2021). "WSJ News Exclusive | Hedge Funds Suffer Big Losses on Biotech Rout". Wall Street Journal. Retrieved April 12, 2023.
  8. ^ "Stock Hedge Funds Erase Billions With Another Year of Losses". Bloomberg.com. December 28, 2022. Retrieved April 11, 2023.
  9. ^ "Perceptive Posts Biggest Loss in Its History". Institutional Investor. January 14, 2022. Retrieved April 11, 2023.
  10. ^ "SEC Sues SPAC Adviser for Not Disclosing Conflicts of Interest". Bloomberg.com. September 6, 2022. Retrieved April 11, 2023.
  11. ^ "SEC Charges Perceptive Advisors". Institutional Investor. September 6, 2022. Retrieved April 11, 2023.
  12. ^ "Perceptive Advisors to pay $1.5m to settle SEC charges relating to SPAC conflicts of interest". Hedgeweek. September 7, 2022.
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