With the proliferation of hedge funds in recent times, how do managers identify potential investment opportunities and keep a competitive edge? The Abernathy Group has developed a unique Collaborative Investing® model which gives them better insight of their target sectors. Eurekahedge caught up with Neil Baim, Managing Director, and asked some questions.
- Who are The Abernathy Group?
The Abernathy Group, a division of Abernathy Financial Services, is the world's premier Registered Investment Advisor (RIA) for medical and information technology professionals. The Abernathy Group's investment partnership funds utilise a unique value investment discipline for superior long-term performance. Collaborative Investing® is our proprietary concept where the clients' hands-on knowledge of medical therapies and technologies are layered onto the research and financial expertise of the firm. Our portfolio managers invest side-by-side with the clients.
- Can you describe the Collaborative Investing® model?
The Abernathy Group invests capital using Collaborative Investing®, leveraging the knowledge of its investment partners who are experts in the medical and information technology sectors. The Abernathy Group clients not only invest alongside the firm's principals – they are a critical source of information. Using this method, the firm is able to cultivate information regarding prospective investment opportunities that other money management firms do not have readily accessible.
- How long have this model been in use?
Established in 1989 by Principal Steven Abernathy, the Collaborative Investing® model has outperformed related indices and many other top money managers for more than a decade. The firm has received recognition from Barron's and Nelson's as having one of the longest and strongest track records in the industry.
- How do you identify your specialist investment partners?
At Abernathy, we look for investment partners who understand the importance of combining both the use of a value investment model as a foundation for portfolio building with the advantages of making decisions with an informational edge.
As the world becomes increasingly complex, and quality business decisions require more detailed foundations of knowledge, we realise that we must be more effective in leveraging the intellectual capital of our Investor Partners. To maintain our position as the world's premier medical and information technology investment advisor and further enhance our knowledge base, we have medical and information technology advisory boards that focus on areas where there is tremendous growth potential.
We currently have two advisory boards focused on leading areas of healthcare: Cardiology and Ophthalmology. Our goal is to populate our advisory boards with the industry's leading practitioners, researchers and thought leaders. The boards are a powerhouse of information, providing incredible insight into investment opportunities in the medical and information technology arenas. By harnessing the intellectual capital of the best and the brightest, both Investor Partner and non-Investor Partner, we will achieve a level of understanding unparalleled in our industry.
Our investment partners are quite loyal and quite satisfied with the stellar long-term performance of the fund and are usually with us for the long run. We look for investors who have a long-term time horizon and are looking for an investment they can understand.
- Your fund is currently invested primarily in US companies. Are there any plans to invest elsewhere?
The fund invests in US companies. Many of the companies we invest in are global in scope, but primarily US based.
What is your view on the technology industry now that the "bubble" has burst? What are your long- term views on the technology and healthcare industries outside of the US?
We believe that both healthcare and technology remain the best places to find opportunities for the long term, and have always had a focus in those areas. We believe that these areas will be the fastest growing both inside and outside the US given demographics and the rapidly advancing world we live in today. Despite the bubble bursting in the tech sector, we still see technology as a great place to find among the best opportunities in the long term.
- How long is the decision making process and how long do you usually hold your positions?
The decision making process clearly depends on the information available and the analysis by our team. We communicate with our partners often, keeping them abreast of what is happening and why. Our buy/sell discipline is quite specific and unique, so the time frame of our holdings depends specifically on our outlook for the individual company.