The 2015 Hedge Fund Rising Stars: Oleg Nodelman

Nodelman’s EcoR1 Capital stands apart from other biotech-focused investment managers by looking for companies with a margin of safety.


Oleg Nodelman

Oleg Nodelman

Born in Ukraine to an immunologist and an engineer, Oleg Nodelman, 38, took the family flair for science down an unconventional path when he founded biotechnology-focused hedge fund firm EcoR1 Capital in 2013. Nodelman’s family left Kiev for San Diego when he was three years old. In 1996, while a student at Georgetown University, he met his future wife, Heather, at the Summer Olympic Games in Atlanta, where he translated Russian for the broadcasters while she translated Japanese. In 1999, armed with a BS in foreign service, Nodelman moved to San Francisco for a job in strategic consulting and organizational management at Mercer Management Consulting. Two years later he joined BVF Partners, a San Francisco–based hedge fund firm that specializes in biotechnology. There Nodelman learned the ins and outs of the business as he worked his way up from research analyst to portfolio manager over the next 11 years before leaving to start EcoR1. He named the start-up after an enzyme discovered in the early 1970s that led to DNA cloning — a big step for the young biotech sector — to symbolize his commitment to building the most relevant fund in the industry. The difference between EcoR1 and many other biotech-centric investment managers is that the firm doesn’t bet on the science underlying its prospective investments, which Nodelman argues is more uncertain than people think. The Bay Area–based value investor picks companies with a margin of safety that may stem from intellectual property, unreleased products or partnerships with big pharmaceuticals developers. The formula is working: As of March the $300 million EcoR1 Capital Fund was up 323 percent since its inception.