Health-care specialist Avidity Partners is tapping into one of the hottest sectors for hedge fund startups, and its early investors are being rewarded.
The Dallas-based firm posted a 14% return in the first quarter, according to people with knowledge of the matter, even as rocky equity markets took a toll on many of its peers. From its Nov. 1 launch through March, the long-short equity fund climbed 26% while the S&P 500 Index slid almost 15% and the SPDR S&P Biotech ETF fell more than 5%.
Avidity, co-founded by David Witzke and Michael Gregory, former money managers at Citadel and Highland Capital Management, respectively, has more than $1 billion in assets after beginning trading with $750 million. The firm, which specializes in therapeutics investments and also bets on and against medical technology, diagnostics and life sciences companies, plans to pause its fundraising efforts in June.