Nobel-Pickers Better Hedge Fund Managers Than Nobel Winners

Robert Merton and Myron Scholes know what we're talking about.
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By Photograph: en:User:Anubis3Medal: Gustav Vigeland (Self-photographed) [GFDL, CC-BY-SA-3.0 or Public domain], via Wikimedia Commons

By Photograph: en:User:Anubis3Medal: Gustav Vigeland (Self-photographed) [GFDL, CC-BY-SA-3.0 or Public domain], via Wikimedia Commons

A Nobel Prize-winningpedigree hasn’t show much of a correlation with successful hedge-fund management; just ask the people who bailed out and lost their shirts on Long-Term Capital Management. But maybe that just applies to dismal "scientists" and the Nobel Prize in economics, which isn’t a real Nobel Prize anyway, because there’s a hedge fund in Sweden investing in healthcare based on what the people who choose Nobelists in medicine think, and so far, it’s working out much better: A 21% annualized return since 2009.

“We make money, sooner or later, on most of the recommendations from the Scientific Advisory Board,” Rhenman, chief investment officer at Rhenman & Partners Asset Management AB, said in a phone interview on Friday. “The advice is most important within biotech and pharma but medtech is getting more important for the scientific board.”

The Stockholm-based fund meets with an advisory board of five medical experts once a quarter which includes Tomas Olsson, a professor in neurology and a member of the Nobel Assembly at Karolinska Institutet, which awards the Nobel Prize in Physiology or Medicine. Rhenman & Partners’ chairman, Hans Wigzell, is a professor in immunology and the former vice chancellor at Karolinska.

Of course, there are signs that even the medical experts may be fallible.

After posting a loss for the first time in 2016 of 12 percent, the fund has rallied 17 percent through February….

Hedge Fund Sees 21% Returns on Advice from Nobel Prize Pickers [Bloomberg]

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