04/14/2010

Davidson Kempner Alum Launches Fund

A medical doctor who once ran a large healthcare fund for Davidson Kempner has started his own hedge fund operation.

Roderick Wong officially founded RTW Investments on March 1 and immediately began trading RTW Onshore and RTW Offshore funds, long/short vehicles that target the healthcare sector. Wong, who launched with less than $100 million, plans to close the doors to new investors once he raises a total of $500 million.

Wong and his three partners - including an analyst who worked under him at Davidson Kempner - are focusing on companies that produce drugs, medical devices and diagnostic tools. RTW employs an event-driven strategy to identify opportunities, primarily in equities, but with a smattering of derivative and debt plays.

Wong previously managed Davidson Kempner Healthcare Fund, which peaked in 2008 with about $750 million under management - making it one of the largest hedge funds in the sector. He started out managing a healthcare book in 2005, and the next year Davidson Kempner promoted the portfolio to a dedicated fund. Wong delivered consistently impressive returns, though the fund lost money in 2008, when the average hedge fund fell 18%. He resigned in early 2009.

Wong's departure was unrelated to the fund's performance. David Kempner shuttered the fund after Wong left and required him to wait a year before starting his own firm.

Since March 1, 2009, Wong has managed his own capital as if it were a hedge fund, complete with audited returns and performance reported net of a typical 2-and-20 fee structure. His returns: 66% for 2009 and 18% for the first three months of 2010, including March, after he launched the RTW fund.

Prior to Davidson Kempner, Wong was a healthcare analyst at SAC Capital's Sigma Capital unit in New York. Before that, he researched biotechnology companies for Cowen Group.

Wong is joined at RTW by Naveen Yalamanchi, also a medical doctor, who was the senior analyst on Wong's team at Davidson Kempner. Sabera Loughran, another partner, is the firm's chief financial officer. She previously was director of finance at Prime Capital, a now-shuttered New York hedge fund shop that ran about $200 million at its peak. Wong's third partner, Maggie Toppin, is RTW's operations manager. She previously worked for hedge fund manager Speece Thorson of Minneapolis.

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