Meridian Funds, managed by ArrowMark Partners, released its first-quarter 2026 investor letter for “Meridian Hedged Equity Fund”. A copy of the letter can be downloaded here. The Fund invests in high-quality growth companies and mitigates risk by writing call options. Following the late-February strike on Iran, oil prices surged, leading to a risk-off sentiment, boosting energy sector performance. Large-cap technology stocks declined as investors rotated towards smaller companies and more defensive value investments. Market conditions are becoming challenging due to reduced expectations for a Federal Reserve rate cut and increasing geopolitical uncertainty. The Fund returned 0.08% (net) for the quarter, outperforming the S&P 500 Index, which fell 4.33%, and the CBOE S&P 500 BuyWrite Index, which declined 0.92%. At the end of the period, 43% of the portfolio was unhedged, while the remainder was invested in companies with covered call options. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Meridian Hedged Equity Fund highlighted Royalty Pharma plc (NASDAQ:RPRX). Royalty Pharma plc (NASDAQ:RPRX) is a biopharmaceutical investment company that specializes in acquiring royalty interests and funding innovation in the biopharmaceutical industry. On June 26, 2026, Royalty Pharma plc (NASDAQ:RPRX) closed at $56.23 per share, reflecting a market capitalization of $32.38 billion. Royalty Pharma plc (NASDAQ:RPRX) posted a one-month return of 1.90%, and its shares gained 56.06% over the past 52 weeks.
Meridian Hedged Equity Fund stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q1 2026 investor letter:
“Royalty Pharma plc (NASDAQ:RPRX) is the industry’s largest buyer of biopharmaceutical royalties, partnering with innovators to co fund late-stage clinical trials and acquiring existing royalties on approved therapies. Our investment thesis focuses on the company’s ability to deliver diversified, long-duration cash flows tied to blockbuster drugs while avoiding the research, development, and manufacturing risks typical of traditional biotech firms. Its scale and structural advantages support the potential for steady top-line growth that is relatively insulated from broader macroeconomic volatility. The stock performed well in the quarter following another earnings beat and expectations for continued strength from established franchises. We maintained our position throughout the quarter.”
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, 42 hedge fund portfolios held Royalty Pharma plc (NASDAQ:RPRX) at the end of the first quarter, up from 39 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 Latitude Investment Management’s views on the company. 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.
