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A Different Way to Invest in Healthcare with Jeff Edelman and Zach Sharon of Pavadi Capital

Jeff Edelman and Zach Sharon are the co-founders of Pavadi Capital, a healthcare-focused investment firm. “We first began working together at a boutique healthcare consulting firm. And then, in 2002, along with four partners, we launched Symphony, a healthcare private equity firm responsible for deploying millions into highly structured investments in the biotech industry. In the years following the 2008 financial crisis, the two of us took on primary responsibility for monetizing and winding down the remaining Symphony investments and entities. After that, we began strategizing on what we wanted to do going forward. Two things were clear, we wanted to continue working together and stay in the healthcare industry.

As we thought about healthcare investing, we saw that most healthcare specialists are crowded into unprofitable development-stage biotech companies that tend to have frequent binary events tied to outcomes of clinical trials and regulatory decisions. They also have higher volatility, beta, deeper drawdowns, and less liquidity. This concentration of most healthcare specialists drove us to create Pavadi Capital.

Pavadi offers investors a different way to allocate capital across the breadth of the industry in a manner that is driven by investing in fundamentally sound companies with strong operating performance and compelling prospects for future growth. We invest in healthcare, public equities, and profitable companies. Our strategy provides investors with actively managed exposure to the healthcare sector and ideally generates the higher alpha and quantifiable differentiation that should come with such an actively managed strategy. We believe that this differentiated approach has us well-positioned for sustained success.”

Tailor Ridge Capital Management

Zachary Sharon, Partner

(212) 632-5411

Pavadi identifies contrarian, value-oriented investments across healthcare. Its concentrated, long-only portfolio is comprised exclusively of profitable companies (no biotech). Fundamentals and valuation drive portfolio construction. Founders have worked together for 20+ years. $133 mm AUM. SEC-registered. Differentiated from the largest broad market and healthcare indices (lower correlation, higher tracking error, lower beta, meaningful alpha). Pavadi is a mnemonic of the firm’s guiding principles - patience, value, and discipline.

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