Morning Brief: OrbiMed Founder Steps Down From Hedge Fund
Samuel Isaly’s resigned due to succession planning, according to an OrbiMed announcement. Two days earlier, Stat reported that former employees accused him of sexual harassment — allegations he denied.
The founder of OrbiMed Advisors, Samuel Isaly, is stepping down from his role as managing partner of the $14 billion biotech hedge fund.
Isaly’s departure is part of “years-long succession planning discussions,” OrbiMed said in a December 7 statement. The announcement followed a STAT news report December 5 that the 72-year-old founder of the hedge fund “for years perpetuated a toxic culture of sexual harassment.” A spokesperson for Orbidmed declined to comment on the sexual harassment allegations.
STAT, an online medical-science publication, said that former OrbiMed employees accused Isaly of “routinely subjecting young female assistants to pornography in the workplace, lewd jokes, and pervasive sexist comments.” The publication reported that Isaly denied the allegations. According to OrbiMed’s announcement, Isaly will be replaced by a management committee that includes Sven Borho, Carl Gordon and Jonathan Silverstein.
Hedge fund moguls and Republican Party donors Kenneth Griffin of Citadel and Paul Singer of Elliott Management are trying to convince Republicans to change elements of the current tax bill before Congress, according to a December 7 New York Times report.
The proposed legislation includes a provision that would prevent executives in partnerships like hedge funds from benefiting from a new, lower pass-through rate. The treatment under that bill would raise taxes for New York-based financial-service partnerships to 50 percent or more, driving business out of New York and into lower-tax states, the newspaper reported. Last week, Griffin went to Washington to press that case, according to the New York Times, which said that Singer “made similar concerns known.”
Bridgewater Associates’ Ray Dalio also spoke out last week against the legislation, saying ending the deduction of state and local taxes would further polarize the country. Residents in blue states like New York, New Jersey, California and Dalio’s home state of Connecticut would be the hardest hit by the exclusion, the Bridgewater founder said in a LinkedIn post.
Shares of Alexion Pharmaceuticals surged December 8 after the New York Times reported Paul Singer’s Elliott Management has a stake in the company and is pushing for changes. The stock closed at $114.46, up 7.2 percent. A person familiar with the matter confirmed that accuracy of the New York Times report. Elliott has not filed a 13D document about its position in Alexion, which means that, so far, its stake is under the 5 percent threshold that would mandate the filing with Securities and Exchange Commission. Based on Alexion’s $25 billion market value, Elliott’s stake is less than $1.25 billion — a small portion of Elliott’s $34 billion under management.
Equity and special situation hedge funds were the top performing hedge funds during November, according to Hedge Fund Research. Equity hedge funds rose 1.07 percent during November, for a year-to-date gain of 12.06 percent, HFR said in its monthly survey. Special situation funds gained 1.51 percent for the month and are now up 10.83 percent for the year.
Overall, however, hedge fund performance rose only 0.47 percent, for a year-to-date gain of 7.55 percent. That performance put hedge funds far behind the S&P 500. The worst hedge fund performers continue to be short-biased funds. They fell 0.98 percent in November and are down 10.03 percent for the year, HFR reported.