(Harvest) After the difficult hedge fund environment of the recent months, innovation is not only necessary, but perhaps mandatory to survive. During 2013 and 2014, the Health Care sector was the source of the majority of alpha in equities. However, in 2015, the trend changed drastically and the sector experienced punishing losses, forcing Health Care-heavy managers to try to rebuild investor trust.
Among these names, one stands out in particular; Larry Robbins. After six years as a U.S. equity long/short analyst at Omega Advisors, Robbins founded Glenview Capital Management, a fund that, until 2015, could virtually do no wrong. The focus on fundamental research and individual security selection, combined with the ability to seek out novel opportunities in Health Care, positioned Glenview to place lucrative bets during the last decade. However, according to public data, the main fund’s heavy Health Care focus led to losses of about 20% through October 2015 [based on simulated performance drawn from 13f disclosures] and resulted in Robbins publicly acknowledging his mistakes. Nevertheless, he still believes in his investment strategy as well as in the long term potential of the Health Care sector.
