HealthCor Management is a $3 billion healthcare hedge fund founded by Arthur Cohen and Joseph Healey. Cohen graduated from the University of Virginia in 1983 with a B.A. degree in Commerce and received his M.B.A. in Banking and Finance from Hofstra University in 1986. He worked for Julian Robertson between 1995 and 2000. He was responsible for healthcare investments as a Managing Director at Tiger Management. He partnered with Joseph P. Healey in September 2005. The duo worked at Steven Cohen’s SAC until 2005.
Healey is a brilliant stock picker (See Joseph Healey’s stock recommendations at the 2009 Ira Sohn Conference). HealthCor returned 4% in 2008, vs. -19% for an average hedge fund. Cohen and Healey invest significant amounts in the healthcare industry by diversifying their portfolio in different stocks. Nearly two thirds of his investments are in the healthcare sector. HealthCor describes its investment style as follows:
HealthCor Partners makes equity and equity-related investments between $5 to $25 million in each portfolio company employing a variety of methods, including: (i) making minority and/or control investments in later stage developmental companies that exhibit favorable asymmetrical risk/reward characteristics; (ii) making significant minority and/or control investments in rapidly growing (private or publicly traded) mid-sized healthcare and life sciences companies; (iii) backing experienced management teams in leveraged buyouts and in creating growing companies through a series of acquisitions (referred to as “build-ups”); and selectively (iv) investing in restructurings, recapitalizations and other “special situations” involving more established healthcare companies. In all cases, HealthCor Partners seeks to be meaningfully involved with its portfolio companies by providing advice and assistance in the areas of strategy, management accountability, financial discipline, capital allocation, sales and marketing, regulatory affairs, acquisitions and divestitures, and accessing the public equity markets.
HealthCor recently disclosed a 17.85% activist stake in Nevada-based CareView Communications Inc (CRVW). HealthCor purchased $20 Million 10-year notes that have an annual interest rate of 12.5% during the first five years and 10% interest during the second five year period. HealthCor also has the option to convert the notes and the accured interest on them into CareView’s stock at a price of $1.25 per share. These notes correspond to 16.4 Million shares of CareView’s common stock.
HealthCor also acquired warrants representing the right to purchase an additional 11.8 Million shares of CareView’s common stock. The warrants have an exercise price of $1.40. As part of the agreement HealthCor’s Jeffrey C. Lightcap was appointed to CareView’s board of directors. Careview currently trades at $1.76 per share.