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On November 26, 2021, the WSJ broke the news about New York hedge fund manager Joseph Edelman, who purchased a 1-acre property in Laguna Beach for $70 million. The New York hedge-fund manager broke a sales record in Orange County, California, when he and his wife Suzy paid $70 million for an oceanfront mansion in Laguna Beach.
Joseph Edelman, the CEO and founder of the biotech hedge fund Perceptive Advisors, and his wife Susan (Suzy) Lebovitz-Edelman purchased the roughly 1-acre property located in a gated community of Abalone Point, which sits on a small peninsula that juts out into the Pacific Ocean and has streets named for getaways of the rich and famous, such as Riveria, Monaco and Monte Carlo drives.
The roughly 18,000-square-foot main residence features five bedrooms, a commercial kitchen, a wine cellar and a screening room, Jonathon Curci of Compass, who represented the buyer, told the Wall Street Journal.
The house is one of about a dozen in Abalone Point, which is in the Irvine Cove area of Laguna Beach.
The deal to purchase the home was completed off-market, and didn’t go off without a hitch, according to the Journal. A neighbor filed a lawsuit in May against the seller, alleging certain obligations associated with the property’s homeowners association had been violated. That neighbor attempted to buy the property via a right of first refusal, but the seller did not accept the offer. That case is ongoing, the Journal reports.
The Edelmans listed their New York City penthouse for sale in March and had been leasing in a home nearby when they struck the deal, according to the newspaper. The Park Avenue building was built in 1912, and features Greek Revival architecture and a limestone exterior. In the 2000s, it was transformed into a condominium. It contains eleven units. The penthouse is the only triplex in the building; its top level—all terrace space but for a home theater with a window seat—adds the third level to this property.
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The unit’s private elevator opens to the lower level foyer, transitioning to an entrance gallery with glossy, inlaid hardwood. The living room features a coffered ceiling and herringbone-pattern floors, and a carved French limestone fireplace. The kitchen is one of the standouts in this extraordinary residence, a rambling, wide-open room with abundant counter and island space, custom cabinetry, a La Cornue stove, and an Ann Sacks tile backsplash.
A wood-paneled library and creative workspace is among the penthouse’s middle-level rooms; the floor’s three bedrooms include a primary with a large private terrace and, with the two lower-level bedrooms, bring the total accommodations count to 5. The level’s gallery opens directly onto the multi-level outdoor terrace, which features a spa and living and dining areas surrounded by plentiful plants.
Last year, another property in the area had been listed for $60 million but was taken off the market, according to the Journal. A nearby property in Newport Coast, California, sold for $61 million last year.
In typical wealth detector mode around the ultra high net worth market, we were intrigued to learn more about Joseph Edelman, his source of wealth, his background and his interests.
So who exactly is Joseph Edelman?
Joseph Edelman is CEO and portfolio manager of Perceptive Advisors, a New York-based hedge fund firm with approximately $15 billion under management.
Edelman founded Perceptive Advisors in 1999 and focuses on investing in biotechnology stocks.
Edelman's main Perceptive Life Sciences hedge fund is down 20% in 2021. It has lost money in only three years since inception.
His fund generated returns of 52% in 2019 and 29% in 2020.
Edelman was born in 1955 to a Jewish family, the son of Isidore Edelman. His father was a renowned scientist who was a professor emeritus of biochemistry and molecular biophysics at Columbia's College of Physicians and Surgeons.
He has three siblings: Dr. Arthur Edelman; Susan Edelman Bleckner; and Ann Edelman Korchin.
To sharpen his skills in business and investment, Joseph Edelman pursued a Master of Business Administration from New York University. He has a B.A., magna cum laude, in psychology from the University of California San Diego.
Prior to founding Perceptive Advisors, LLC in 1999, Mr. Edelman was Senior Analyst at Aries Fund, a Paramount Capital Asset Management biotechnology hedge fund, from November 1994 through December 1998. Prior, he was Senior Biotechnology Analyst at Prudential Securities for four years.
He started his career in the healthcare sector of the securities industry as Biotechnology Analyst at Labe, Simpson, followed by stints as an analyst at Prudential Securities and then at Paramount Capital Asset Management for a biotech hedge fund called Aries. In February 1999, he joined First New York Securities, a proprietary trading shop that gave him $6 million to run a managed account.
He launched Perceptive as a stand-alone fund in July 1999.
The firm takes its name from the way it analyzes corporate events in the biotech sector, which is rooted in Edelman’s psychological training. “We gain a competitive edge by understanding the ‘perception’ of these events and then only investing in ‘reality’ after conducting in-depth research,” the firm says in a pitchbook for the Perceptive Life Sciences Fund, adding that it uses “careful risk management” to mitigate the volatility around these stocks. “In our view, investment decision biases are the single greatest impediment to generating positive investment returns.”
Since 1999, then the firm, which started with $6 million in assets, has swelled has been performing well and has about $15 billion under managed 13F securities as of Q1 2021. Perceptive Advisors posted returns of 129% and 155%, in 1999 and 2000 respectively. During the early five years between 1999 to 2003, the hedge recorded positive returns except in 2002 when it lost 10%.
Notably, the hedge fund posted returns of 24% and 16% in 2009 and 2010, respectively. However, in 2008, the Perceptive Advisors lost 24%. Later in 2019 and 2020, Perceptive Advisors hedge fund returned 52% and 29% returns, respectively.
Among the notable holdings of Edelman as of the first quarter of 2021 include Exact Sciences Corporation (NASDAQ: EXAS), Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) and Neurocrine Biosciences, Inc. (NASDAQ: NBIX).
“They are the best in our business and I think the world of them. Joe is absolutely amazing and he’s got an incredible team there,” says Brad Loncar, a longtime biotech investor and the founder of Loncar Investments, a small family office specializing in the sector that also operates two biotech indexes.
But Perceptive’s astonishing long-term annualized return has come with a hefty dose of volatility — and some questions.
The fund has occasionally posted huge single-month losses, such as its nearly 12 percent drop in January 2016 — and equally volatile single-month gains that sometimes reach double digits (it posted a single-month gain of nearly 69 percent, by far its biggest ever, during its second month in existence).
“I don’t want to be a hedge fund manager who doesn’t take much risk,” Edelman told Forbes earlier this year. “Otherwise, why am I doing this?”
Edelman’s net worth is north of $3 billion.
Suzy Lebovitz-Edelman, his wife, is the Co-Chair, Head of Strategy & Advocacy at Edelman Family Foundation, according to her Linkedin. She attended Brown University, which can explain why Joseph is a Trustee of the Corporation for Brown University.
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