Patient Capital Management, based in Baltimore, released its first-quarter 2026 investor letter for the “Patient Opportunity Equity Strategy,” available for download here. The strategy’s long-term value approach aims to build wealth over time. It returned -5.96% net of fees in Q1, compared to the S&P 500’s -4.33% return. As per three-factor performance attribution model the underperformance was due to selection and interaction effects, partly offset by allocation effects. The year started strongly with markets reaching an all-time high in late January, then reversed. AI fears sparked a “SaaS pocalypse,” while ‘hyperscalers’ CAPEX worries affected returns. Software debt and illiquid markets unsettled private credit, leading most BDCs to restrict redemptions. Middle East conflicts pushed crude oil prices higher, further increasing the risk of inflation. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Patient Opportunity Equity Strategy highlighted Royalty Pharma plc (NASDAQ:RPRX). Royalty Pharma plc (NASDAQ:RPRX) is a biopharmaceutical investment company that specializing acquiring royalty interest and funding innovation in the biopharmaceutical industry. On April 10, 2026, Royalty Pharma plc (NASDAQ:RPRX) closed at $47.90 per share. One-month return of Royalty Pharma plc (NASDAQ:RPRX) was 3.90%, and its shares gained 48.34% over the past 52 weeks. Royalty Pharma plc (NASDAQ:RPRX) has a market capitalization of $27.71 billion.
Patient Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q1 2026 investor letter:
“Royalty Pharma plc (NASDAQ:RPRX) was the top contributor to the strategy in the first quarter, gaining 25.6%. The stock demonstrated its durability in a quarter where elevated macro and market risks took center stage. The company is the world’s largest buyer of biopharmaceutical royalties, providing capital to drug developers in exchange for a share of future revenues. This structure delivers broad pharmaceutical exposure while generating highly predictable, royalty-based cash flows. The company maintains strong deal discipline, consistently achieving unlevered IRRs in the low-teens and levered returns in the high-teens, and continues to find attractive opportunities as both early-stage companies and large pharma players seek non-dilutive financing. We continue to find the stock undervalued relative to the quality and predictability of its cash flow and expect the company to continue compounding shareholder returns in the mid-teens through a combination of royalty growth, dividend growth, and buybacks.”
Royalty Pharma plc (NASDAQ:RPRX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 39 hedge fund portfolios held Royalty Pharma plc (NASDAQ:RPRX) at the end of the fourth quarter, up from 34 in the previous quarter. While we acknowledge the risk and potential of Royalty Pharma plc (NASDAQ:RPRX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Royalty Pharma plc (NASDAQ:RPRX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Royalty Pharma plc (NASDAQ:RPRX) and shared the list of dirt-cheap stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
