The secret of the hedge fund industry is that the best-performing funds are nearly always the newest — and usually the smallest. These are great funds to piggyback, as they are structured to perform in any market condition, and they tend to put up big numbers.
Sure, everyone these days has heard of Carl Icahn, George Soros, even folks such as David Einhorn. But how many people have heard of Joseph Edelman? You may be surprised to hear he runs the best-performing hedge fund in the world today: Perceptive Advisors.
Perceptive has returned an incredible 42% annualized since 1999. That means $10,000 invested in this hedge fund at its inception would be worth an incredible $1.3 million dollars today.
You’re probably saying, “Sign me up!” Well, unfortunately, the SEC has made hedge funds such as this available only to the super rich. To invest in a fund such as Perceptive Advisors, you have to meet accredited investor criteria, which means you must have at least $1 million in investable assets or an earned income of more than $200,000 ($300,000 with a spouse) over the past two years. Even if you fit the profile of an accredited investor, funds like Perceptive tend to have very high minimums ($5 million or more). Furthermore, Perceptive charges a hefty 2% management fee and 25% performance fee to investors.
So what do you do?
This has been an issue facing the broad investing public for a long time. The deck is stacked squarely against the average investor. Rich investors have access to good strategies; average investors get stuck with dog-meat mutual funds and stock-tip hype perpetuated through the media.
But don’t worry: If you’re reading this note, you have an alternative. We are filling this void. We are pioneering a change to the one-sided model that has driven Wall Street forever. They’ve given you big losses in bad years, and only a fraction of the returns in good years. In short, the Wall Street model is set up to give you all the risk, and they get the lion’s share of the return.
Wealthy, sophisticated investors don’t accept that treatment. Nor should you.
That’s why my partner and I have used the power of the Internet to design a new model; we give average investors across the world access to sophisticated hedge fund strategies and analysis. Our Billionaire’s Portfolio is the only service in the world that gives the average person an opportunity to co-invest with the world’s greatest billionaire investors and hedge funds including Perceptive Advisors. It’s a concept we call piggyback investing. This has proven so groundbreaking that Barron’s recently ran a feature piece about us in their Electronic Investor Column.
Furthermore, we know this system works; in 2013 we piggybacked three different top-performing hedge funds to gains of 260%, 220% and 110%. Already this year we have piggybacked one of the best-performing hedge funds to a 72% gain, 10 times more than what the S&P has returned this year. Furthermore, this stock was the top-performing stock in all of the S&P 500 this year.
Perceptive Advisors is the perfect hedge fund to use our groundbreaking piggybacking concept on. Perceptive specializes in taking big positions in small-cap biotech stocks, which can double, triple or even go up 1,000% in a year. Joseph Edelman is one of the most seasoned biotech investors on the planet. He employs numerous analysts, all with life-science backgrounds and many with PhDs, from the world’s top schools, including Princeton and Harvard.
Perceptive is essentially a biotech “think tank,” and they spend millions of dollars on research before they make an investment in a stock. That is why they are so good, and why so many of the stocks they have owned in the history of their fund have returned 200%, 300%, even 1000% in less than a year.
Last year Perceptive returned 65%, doubling the S&P 500’s return; they owned four stocks in their portfolio that went up more than 500%.
Biotech stocks are event driven, meaning they move up or down on news, such as clinical trial data and FDA approvals. They have little correlation to the overall stock market or the economy, and that is why funds such as Perceptive made money in 2002 and 2011, when the stock market was down double digits.
After the recent biotech selloff, there may be no better time to piggyback one of Perceptive’s small-cap biotech stocks.
President of The Billionaires Portfolio