WEST PALM BEACH, FL (www.hedgeco.net) – Hedge funds have helped push equity issuance in the biotechnology sector to grow again in recent months. Biotechnology analysts said issuance of biotechnologyequity issuance has once again accelerated in July. Hedge fund investors are also credited for helping push up the level of the biotech equity issuance through cash demands.
According to new reports, the BTK biotech index has shot up almost 11 per cent over the past month and 21 per cent since the issuances started three months ago. Cully Davis, director in the Equity Capital Markets group at CSFB in Palto Alto said, “There was almost no activity in the space for [the preceding] three months and market conditions had been relatively poor for almost a year.�
Hedge funds with lots of cash have found biotech sector an appealing investment option, and are increasingly dedicated more assets towards the industry. With increasing activities in the merger and arbitrage strategies, hedge fund momentum investors have channeled more of their money into the biotech sector.
Mr. Davis explained further that, �The interest is there. As long as deals continue to price successfully and merger and acquisition activity continues, the move could still have some legs.� He added, “The biggest risk is a change in momentum around pricing activity, this is the first catalyst that will trigger investors to start to look elsewhere.”
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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