Davidson Kempner Healthcare Vet Launches Hedge Fund

Apr 15 2010 | 11:24am ET

A top healthcare hedge fund manager has gone into business for himself. Roderick Wong, who managed Davidson Kempner Capital Management’s healthcare investments for four years, has founded RTW Investments.

The new firm launched its maiden fund on March 1 with less than $100 million, Hedge Fund Alert reports. But Wong—who is a medical doctor, to boot—has been managing his own money in the strategy since he left Davidson Kempner early last year, returning 66% over the last 10 months of 2009 and another 18% through the first quarter of this year.

The RTW fund is an event-driven vehicle, accoring to Hedge Fund Alert. It invests primarily in stocks—pharmaceuticals, medical device makers and diagnostic tool markets are its current focus—but will also invest it derivatives and fixed-income instruments.

The fund charges 2% for management and 20% for performance. Wong plans to close the fund to new investments at $500 million.

Wong managed Davidson Kempner’s $750 million Healthcare Fund to great effect from its launch in 2006 to its peak in 2008. Beginning as a healthcare portfolio in 2005, the fund enjoyed consistent returns until 2008, when it lost 18%. Wong resigned shortly thereafter, and Davidson Kempner shuttered the fund. Wong joined Davidson Kempner from SAC Capital Advisers, and earlier did a stint as a biotechnology researcher at boutique investment bank Cowen Group.

At RTW, Wong is joined by three partners: Naveen Yalamanchi, a fellow doctor who served as Wong’s senior analyst at Davidson Kempner; CFO Sabera Loughran, who most recently worked at defunct hedge fund Prime Capital; and Maggie Toppin, RTW’s operations manager, who joins from Minneapolis hedge fund Speece Thorson.

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