Devices & Diagnostics

Synaptic Capital hedge fund targets healthcare sector

Synaptic Capital is raising money for a hedge fund looking to target mid- to large-cap companies in the innovation and delivery side of the healthcare sector. The Synaptic Medical Fund uses an equity long-short strategy and its investment targets include medical device and pharmaceutical companies as well as hospital systems. An equity long-short strategy takes […]

Synaptic Capital is raising money for a hedge fund looking to target mid- to large-cap companies in the innovation and delivery side of the healthcare sector.

The Synaptic Medical Fund uses an equity long-short strategy and its investment targets include medical device and pharmaceutical companies as well as hospital systems. An equity long-short strategy takes long positions in stocks expected to increase in value and short positions in stocks expected to decrease in value.

It is looking for investments of at least $250,000, according to a Form D filing with the U.S. Securities and Exchange Commission.

John Fraunces, the managing partner and portfolio manager for the fund, has a background steeped in healthcare and finance. He started his career as a peptide chemist with Magainin Pharmaceuticals before moving to Pain Weber as an associate analyst in biotechnology. He later worked for Gardner Lewis Asset Management and as an equity analyst covering the healthcare sector and as a portfolio manager at Solaris Asset Management, where he focused on  the healthcare sector.

The company is based in Havertown, Pennsylvania.

Several investment managers have been launching hedge funds for healthcare sector investment because of patient demographic trends,  because of investment opportunities and because it is not correlated with the European debt crisis.

In an interview with HFM Week, Winston Black, partner at PBS Capital Management, a healthcare hedge fund based in Texas, said he sees opportunity in the healthcare sector in light of wider market uncertainty.

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A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

“It is a good time to invest in healthcare because the underlying patient demographic trends are not correlated to the European credit crisis,” he said.

Roderick Wong, who managed a $750 million healthcare fund for Davidson Kempner Capital Management, launched his own hedge fund targeting the healthcare sector last year under RTW Investments.