Acquisition International - International Fund Awards 2017 7 Bhatt Innovation Capital LLC IF17012 Best New Long/Short Equity Hedge Fund: Bhatt Innovation Capital Bhatt Innovation Capital LLC Vinit S. Bhatt and Hilarey Bhatt, MD are founders and managing members of Bhatt Innovation Capital, and together, they manage all aspects of the fund. Their primary focus is on using their extensive experience in medicine, science, and engineering, as well as in investment, to find those opportunities that are normally too complicated and intangible for most on Wall Street. Dr. Hilarey Bhatt has five years of experience in basic and applied life science research, as well as 17 years’ experience as a practicing and teaching physician. These years of experience make her uniquely capable of evaluating companies’ product portfolios, from the earliest bench investigations into fully developed and marketed stages. Dr. Bhatt is the holder of an MD from the University of California – San Francisco, an MPhil in Neuroscience from Yale University, and a BA from Amherst College, where she graduated summa cum laude. Vinit S. Bhatt’s background in engineering coupled with his 20 years’ experience in fundamentally- based investing affords him the potential for unique insights into firms poised to potentially benefit from advances in technology, and the ability to recognize those which are likely to fall behind. Mr. Bhatt is the holder of an MBA from The University of Chicago – Booth School of Business, an MS in Chemical and Biochemical Engineering from the University of Virginia, and a BS in Chemical Engineering from the University of California-Berkeley. Hilarey and Vinit explain that their fund utilizes a long/short strategy, which is used to generate alpha for both the long and short investments, not in order to hedge the long book. “The Fund’s investment strategy encompasses a bottom-up, fundamentally-driven, substance- oriented, research-intensive approach. The fund primarily invests in public companies operating in the technology, biotechnology, pharmaceutical, telecommunication, manufacturing, chemical and media sectors, for example digital entertainment and video gaming. “We manage the risks presented through diversification, very careful stock selection, and by allocating opportunity in accordance with the risk that we perceive. Understanding risk in innovation- driven companies requires extensive experience in medicine and the sciences, and a bottom-up research approach. Consequently, we track the latest technological breakthroughs in both industry and academia, and we spend a great deal of time reading articles in medical and science publications. “Our risk management is also complemented by shorting stocks. Our short strategy is not necessarily for hedging the long book, but for generating alpha. We developed proprietary algorithms based on published academic research that can very quickly screen for companies with deteriorating business fundamentals. We then do further bottom-up research to identify those companies most likely to fail and suffer share price contraction.” Vinit and Hilarey note that success in the hedge fund industry, especially for an emerging manager such as themselves, requires their investors to have a high level trust and comfort with the investment manager. “We think that this level of trust and comfort comes with operational transparency, resiliency and efficiency. In line with this, we are employing a unique out-sourced model which allows for better operational efficiency, compliance and transparency. Fund management and core investment decisions are handled by our internal team of two, with day-to-day accounting and compliance oversight performed by Constellation Advisers, a third-party. Maples Fund Services, our administrator, is directly networked to Interactive Brokers, the prime brokerage, and we utilize a cloud- based IT platform which is managed externally by Proactive Technologies. Our computer network links all of these operations - trading, accounting, compliance, and administration - together. This structure allows us to focus on investing and on being nimble in trading, while ensuring to our investors that there is no oversight in our process. “As far as technology is concerned, we always make sure that we are at the forefront, both for hardware and for cloud-based software, which allows us to remain on the cutting edge of new developments. We have employed the latest in cloud-based IT, including the best CRM software, for communication with our investors, as reliable information technology gives us efficiency in portfolio management and better communication with our investors. We always aim to make ourselves as accessible as possible for our investors through a direct line, using this to our competitive advantage within the industry to assure our clients that we are the best possible solution. We are also markedly different from our competitors in the hedge fund industry, owing to our focus on innovation-based companies, our extensive backgrounds in medicine, science and engineering, and our unique outsource-based model. “Looking to the future, we believe that investors in hedge funds will demand better performance and transparency, which we intend to meet with our business model. We launched our fund in January 2016, and concentrated our effort over the year on performance and operations. Going forward, we want to continue generating excellent performance for our clients and enjoying what we do!” Bhatt Innovation Capital LLC’s fund is well differentiated from most in the hedge fund industry; Bhatt Innovation Capital LP is a woman-and-minority-managed long/short equity hedge fund that seeks to capitalize on both innovation and obsolescence cycles in technology-driven markets. We spoke to Vinit S. Bhatt and Hilarey Bhatt, MD to find out more about this specialist fund. Company: Bhatt Innovation Capital LLC Name: Vinit S. Bhatt and Hilarey Bhatt, MD Email:
[email protected] and
[email protected] Web: www.bhattic.com Address: 507 Miller Avenue, Suite 2, Mill Valley, CA 94941 Telephone: Office: 415-569-4501; Cell: 415-816-4900