RA Capital Management returns an estimated 10.09% for May
RA Capital Management Llc returns an estimated 10.09% for May 2015 - the fully hedged version returns 5.39%
RA Capital Management Llc generated a 10.09% return on their publicly disclosed long portfolio for the month ending May 2015, outperforming the S&P500 by 1008 basis points (bps). On a hedged basis, the portfolio would have returned 5.39% StockAlpha over the same period. RA's StockAlpha reflects the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Health sector contributed the most to StockAlpha during the month.
Positive Contributors to RA's Returns
RA’s position in BioCryst Pharmaceutical Inc. (BCRX) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of May 2015, Ra's 7% position in BioCryst Pharmaceutical Inc. (BCRX) increased in value by 21.3%, contributing 1.49% (7%*21.3%=1.49%)to the long portfolios overall return. Looking at Ra's portfolio through a fully hedged StockAlpha lens, the holding of BioCryst Pharmaceutical Inc. (BCRX) also provided the largest contribution to fully hedged returns. BioCryst Pharmaceutical Inc. (BCRX) returned 48.6% during the month compared to the Health sector, which returned 4.5%. As a result, after taking into account BioCryst Pharmaceutical Inc. (BCRX)'s beta relative to its sector, the position contributed 1.2% of StockAlpha to the RA’s monthly performance.
Negative Contributors to RA's Returns
Much of the drag on RA’s long-portfolio during the month can be attributed to the holding of Dicerna Pharmaceuticals Inc (DRNA). Over the month of May 2015, the manager's 6.5% position in Dicerna Pharmaceuticals Inc (DRNA) returned -14.7%, contributing -0.96% (6.5%*-14.7%=-0.96%)to the long portfolios overall return. Looking at RA's portfolio through a fully hedged StockAlpha lens, the holding of Dicerna Pharmaceuticals Inc (DRNA) also provided the most negative contribution to fully hedged returns. Dicerna Pharmaceuticals Inc (DRNA) returned -14.7% during the month compared to the Health sector, which returned 4.5%. As a result, the position contributed -1.2% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Of RA’s top 10 largest positions, Dicerna Pharmaceuticals Inc (DRNA) is the name that is owned by most other hedge funds. 1.1% of hedge funds within Symmetric's universe had a position in Dicerna Pharmaceuticals Inc (DRNA) as of March 31, 2015, making it a contrarian name relative to other stocks, even though it is the most consensus within the manager's top positions. RA initiated its position in Dicerna Pharmaceuticals Inc (DRNA) 1 year ago. Other hedge funds that have significant ownership stakes in Dicerna Pharmaceuticals Inc (DRNA) include Dafna Capital Management Llc (1.9% position initiated 0.5 years ago), Ghost Tree Capital Llc (1.6% position initiated 0 years ago) and Sectoral Asset Management (1.2% position initiated 0.3 years ago). Overall, RA's book is contrarian, with the average position held in the portfolio held by 3.2% of hedge funds.
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