London-based Marshall Wace, which manages about $52bn in assets, is raising as much as $400m for a fund that will invest in privately owned healthcare companies, according to people familiar with its plans. The strategy is to buy them before flotation and then hold on to them after they list.

The Marshall Wace and Third Point launches underscore how the lines between the hedge fund and private equity industries are becoming increasingly blurred, as managers trading highly priced public markets look for new sources of returns. The new fund, which will lock up investors’ cash for a number of years, will aim to invest in companies that are between about six and 24 months away from going public, in areas such as biotechnology, medical technology and life sciences. It is likely to invest in companies in the US, Europe and Asia.

The healthcare sector has been in investors’ focus over the past year as drugs companies have raced to develop treatments and vaccines to combat the Covid-19 pandemic. Marshall Wace already holds about $10bn of investments in listed healthcare assets, including the effects of leverage.

Its flagship Eureka fund and its Tops (Market Neutral) fund, which analyses buy and sell recommendations from about 1,000 external analysts at banks and research houses to determine its bets, both gained more than 14 per cent last year, according to investors. In January Eureka lost 1.5 per cent, and Tops (Market Neutral) gained 3.8 per cent.


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