GLG – The hedge fund and prime brokerage industry, fixated on exploiting ‘market inefficiencies’ wherever they may be found in whatever form they may be found in, continues to avoid the most lucrative ‘inefficient market’ opportunity that exists, the biotechnology sector. This avoidance is driven by the fear of the complexity of the area, even though that complexity is the source of the ‘market inefficiency’.
Credit Suisse’s new research push into ‘large-cap biotech’ should help hedge funds face their fear of biotechnology. This writer, uniquely experienced in both biotechnology and finance, asserts that the required ‘knowledge arbitrage’ capability is more available than commonly thought and presents a ‘where next’ hedge fund strategy for tapping into this ongoing source of ‘excess alpha’.
