Still managing one of the largest equity hedge funds in the Nordics, even after slipping below the $1 billion asset level from a few years ago, healthcare-focused boutique Rhenman & Partners is aiming to expand its investor base in Europe. CEO Teresa Isele acknowledges that a challenging healthcare market has made this growth harder, but she sees signs that sentiment is beginning to turn.
“One of our strategic focuses is to grow our investor base in Europe,” Isele says in an interview with AMWatch. “This has been difficult recently when the healthcare sector has been so suppressed. But I think sentiment is now changing,” she observes. Rhenman & Partners, which manages a long-biased long/short equity fund focused on healthcare, currently oversees $681 million in assets under management and is aiming to reclaim the $1 billion milestone it held just a few years ago.
“One of our strategic focuses is to grow our investor base in Europe. This has been difficult recently when the healthcare sector has been so suppressed. But I think sentiment is now changing.”
Rhenman Healthcare Equity L/S draws on a mix of family offices, retail investors, and professional investors, primarily in the Nordics, with additional investors in Switzerland and the United Kingdom. “We do have bigger institutions among our investors, but the customer base consists mainly of family offices,” Isele tells AMWatch. “The majority of our investors are in the Nordic region, but we do have quite a lot of investors also in Switzerland and the UK,” she continues. “Family offices are a globally growing investor segment. They tend to like healthcare as an investment theme.”
Rhenman & Partners’ strategy for growing its European investor base centers on “more people, more contacts, and more boots on the ground,” Isele explains. To support this, the boutique has expanded its client-facing team from one to three. In late 2024, Mattias Hagen joined as Investor Relations Director, working alongside Erica von Bahr and Tom Josephson to strengthen engagement with investors, particularly across Europe. “Before, we went to Switzerland and the UK on an ad hoc basis but now we are putting our boots on the ground and traveling there more often,” says Isele. “We have also teamed up with third-party marketers that have wide networks in Europe and can help us with the expansion.”
She acknowledges, however, that competition for client capital remains intense. “There is a lot of competition, but at the same time many investors want exposure to healthcare because it serves fundamental needs of societies and historically has had the ability to reinvent itself by being highly innovative,” Isele tells AMWatch. She adds that ageing populations in many Western countries are driving higher healthcare spending, while advancements in AI and rising living standards provide additional long-term tailwinds for the sector.
“In terms of our investor base, we feel that we are now getting more requests. People seem a bit more interested in investing in healthcare, and we hope sentiment is shifting.”
The healthcare sector faced a challenging market environment in the first half of the year, including for Rhenman’s long-biased equity fund, but August brought a break in a string of consecutive monthly losses. This upturn has also signaled a potential shift in investor interest. “The health care sector has underperformed in the first half of this year, with basically no net funds into the sector. Both returns and inflows have been weak, but now in August we finally saw some improvement and the sector performed second best in the S&P 500 index,” Isele tells AMWatch. “In terms of our investor base, we feel that we are now getting more requests. People seem a bit more interested in investing in healthcare, and we hope sentiment is shifting.”
