Seligman’s Healthcare Wager Pays After a $10 Million Seed

Seligman Investments opened the Seligman Healthcare Spectrum Fund in late March 2024 with $10 million of internal capital. Kosta Kleyman, a pharmacist who had been the healthcare specialist inside Paul Wick’s technology hedge fund, took the book.

The seed sat beside a much larger tech vehicle. It was a bet that a long-short healthcare sleeve, about 60 percent in biotech at launch, could still make money after the first obesity-drug rally and a round of rate-cut talk.

A $10 Million Seed Inside Paul Wick’s Shop

Seligman is the alternatives unit of Columbia Threadneedle Investments, itself the asset manager for Ameriprise Financial. The firm already ran a hedge fund platform for technology and healthcare under Wick, the chief investment officer, and it listed $7.2 billion of hedge fund assets in those two sectors on its institutional site. Columbia Threadneedle later put its own assets under management at $678 billion, or £504 billion, as of 31 December 2025, with a $68 billion alternatives sleeve cited in an October 2025 trust statement.

The new onshore fund and an offshore twin began trading that March week and were already looking for outside money. Seligman declined to comment at the time. Kleyman, who holds a PharmD, had spent seven years on cancer-drug commercialisation and clinical development at Genentech/Roche, AstraZeneca, and Arcus, with earlier industry time at Allergan, then a seat at healthcare hedge fund Acuta Capital before joining Columbia Threadneedle in 2020.

For three and a half to four years he had been the principal healthcare person on the Seligman Tech Spectrum Master Fund, mostly on the short side. That master fund had $2.4 billion and was up 4.45 percent through February 2024. The healthcare sleeve he then took public was built to run 85 percent long and 40 percent short, a net long near 40 to 50 percent that the firm told investors could fall to 20 to 30 percent if markets got frothy.

THE LAUNCH BET

• The seed: $10 million of internally sourced capital, with a live raise around it.
• The mix: About 60 percent in biotech, with the rest in devices, services, managed care, hospitals, tools, diagnostics, and tests.
• The net: A 40 to 50 percent net long in normal conditions, with room to cut toward 20 to 30 percent.
• The manager: Kleyman, already running healthcare analysis inside Wick’s tech book.

The strategy itself was older than the fund. Columbia Threadneedle dates the Seligman Healthcare Strategy to 1 July 2023, months before the standalone vehicles opened, and later used separately managed accounts, retirement sleeves, and mutual funds under that brand as the track-record base.

The Short Book Paid When Biotech Sold Off

By 31 December 2025 the strategy had delivered 109.0 percent net in sterling since inception, or 124.4 percent gross, according to the February 2026 shareholder circular. The Russell 3000 Health Care Index returned 15.2 percent over the same span, and a biotech index 40.0 percent. Calendar 2025 alone was 54.1 percent net for the book, against 6.7 percent for Russell 3000 Health Care and 26.6 percent for the biotech gauge.

The year that matters for the original wager is the one in the middle. From July 2024 through June 2025 the strategy made 13.2 percent while the biotech index fell 17.3 percent and Russell 3000 Health Care lost 13.4 percent. That is the stretch when a net-long healthcare fund that could not get short would have been carrying the sector’s drawdown, not harvesting it.

THE STRATEGY VERSUS HEALTHCARE INDICES

Those net figures already take off a 0.95 percent management fee, estimated 0.46 percent operating costs, and a 15 percent performance fee over three-month SONIA with a high-water mark, the circular says. Annualised net return over the full window was 34.3 percent. The second half of 2025 was a different tape: the book’s 48.4 percent gain sat next to a 50.4 percent biotech surge, so the edge in that half was not a short-side windfall.

Specialist healthcare hedge funds as a group had a banner calendar 2025. The HFRI Equity Hedge Healthcare Index finished up 33.8 percent, its strongest year on record in that series, with a 45.8 percent climb from June through December. A Goldman Sachs note in July 2026 later said 24 percent of new hedge funds launched in 2026 were dedicated to healthcare, the highest share since at least 2009, and put specialist healthcare books at about $283 billion of equity hedge-fund assets.

Kleyman’s Team of Eight Took the London Book

Broker Winterflood, in October 2025, put Kleyman’s healthcare assets across the Columbia Threadneedle alternatives business at about $500 million. That same month the board of Bellevue Healthcare Trust, a London-listed vehicle that had been through a three-month strategic review, named Columbia Threadneedle as incoming manager and said it would adopt the Seligman Healthcare Strategy, with Kleyman as portfolio manager and eight analysts behind him.

Kate Bolsover, then chair of the trust, said shareholders had given the plan “significant support” and called the appointment “a highly differentiated and compelling opportunity to deliver long term risk adjusted shareholder returns from the healthcare and biotech sector.” Kleyman’s own line, in the 30 October 2025 appointment statement, put the case in sector language rather than fundraising language.

We believe healthcare is one of the most fertile grounds for alpha generation, with the sector constantly innovating while navigating complexity and often significant peaks of volatility. The Columbia Threadneedle healthcare strategy is designed to maximise shareholder return by exploiting these areas through a disciplined long/short approach, which looks to identify breakthrough opportunities while actively managing risk.

Kosta Kleyman, Portfolio Manager, Seligman Investments, October 2025 appointment statement

Shareholders voted on 4 March 2026. The resolution to change the investment objective and policy passed with 17,006,678 votes in favour, 99.73 percent of votes cast, against 46,657. Columbia Threadneedle’s appointment became effective on 5 March 2026, and the company became CT Healthcare Trust, ticker CTHT. The circular had already noted that, on the day of appointment, the trust would be the only publicly traded vehicle offering the strategy.

A 100 percent tender ran beside the vote. Holders tendered 29,922,562 shares, about 40.9 percent of the 73,199,234 then in issue, at 139.7186 pence. After the purchase on 6 March 2026, 43,276,672 shares remained in issue, excluding treasury. Threadneedle Asset Management Holdings, or another UK Ameriprise affiliate, said it intended to subscribe for up to the sterling equivalent of $25 million of new shares to support scale after that exit.

The fee schedule matched the circular’s model: 0.95 percent of NAV per year, plus 15 percent of NAV growth above average three-month SONIA, with a high-water mark. Columbia Threadneedle also agreed to offset transition costs against the base fee for up to 12 months. Marrack Tonkin, head of investment trusts at the firm, spoke for the house on the vote day as the name change went through.

How the Book Is Built Now

The public playbook is tighter than the 2024 launch note. About two thirds of the strategy now sits in biotech or pharma, with the balance in med-tech, services, and tools, and the typical gross exposure of 120 to 165 percent sits against a net between 0 and 50 percent. US-listed names are about 85 to 90 percent of the book, with Europe and Asia filling the rest.

HOW THE TEAM SIZES RISK

• Position caps: Largest longs are typically 3 to 4 percent; higher-volatility names are usually kept below 1 percent.
• Top of book: The top 10 positive positions are usually 25 to 30 percent; the top 10 negative positions 12 to 18 percent.
• Name count: The policy calls for a diversified book of at least 40 companies, mixing long and short exposures.
• Hard limits: No single name above 15 percent of gross assets; unlisted securities capped at 15 percent, with borrowing limited to 10 percent of NAV.

Kleyman’s eight analysts are split by sub-sector across biotech, pharma, med-tech, healthcare services, and treasuries, and the group includes PhDs, PharmDs, and MScs hired to read clinical data, filings, and medical literature. Positions are run against stated upside and downside targets, with higher-risk names kept small and what the firm calls durable compounders kept larger. The trust’s own site says there is no comparable benchmark for the portfolio, only related healthcare indices for comparison.

That construction is the operational answer to the 2024 pitch. A 60 percent biotech sleeve at launch has become a two-thirds therapeutics book, and the net long that started near 40 to 50 percent is now described as a band that can sit as low as zero. The short side is not a hedge overlay. It is a second source of names, aimed at companies facing structural or clinical trouble.

Kleyman Warns Cheap Followers Will Shorten Drug Moats

The scientific premise is blunt. The trust’s materials, citing the National Library of Medicine, note that over 90 percent of drug programs fail, which is why a team that can read a trial can be paid on both sides of a readout. Kleyman has also used that operating background, the firm says, to judge which companies are realistic merger targets and why, a useful skill in a year when deal talk returned to the sector.

The same manager has started talking about a different kind of competition. In remarks circulated in late August 2026 he argued that Chinese groups can now build a credible follow-on against a validated mechanism, run early trials faster and cheaper, and license the result to a Western firm within a few years of the original. “I don’t know if we’ll ever have another Revolution Medicines again,” Kleyman said. “As soon as a company shows some promising data, a very similar drug is going to be out there and move really fast.”

That warning sits on top of a crowded specialist field. Goldman’s July 2026 note had already put healthcare hedge-fund exposure near a five-year high and tied the bid to AI-assisted discovery, easier financing, and an estimated $173 billion of healthcare deal volume for 2026. If scarcity of unique assets is what supported 2025’s multiples, a faster copycat cycle is a direct hit on the long book Kleyman still wants two thirds of capital in.

He sounded a second note in CT Healthcare Trust’s first interims after the March handover, released in August 2026. Restrictive interest rates and sticky inflation, he said, could weigh on the sector’s recovery in the second half. Over that interim window the trust lost 1.1 percent, against a 5.1 percent drop in the MSCI healthcare gauge it was measured against. The private strategy’s 2025 run and the listed vehicle’s first months are not the same tape, and he was not treating them as one.

A £62.5 Million Trust That Still Needs Scale

The original $10 million seed did what a seed is supposed to do. It created a track record a London board could hand to shareholders, and those shareholders voted the book in. The unfinished piece is the wrapper. Quarterly tenders of up to 15 percent of share capital replaced the old zero-discount policy and annual redemption, and holders have used them.

FROM SEED TO PUBLIC MANDATE

1. 1 July 2023: Seligman Healthcare Strategy inception, later the official start date for the track record.
2. Late March 2024: Seligman Healthcare Spectrum Fund and an offshore twin begin trading with $10 million of internal capital.
3. 7 August 2025: Bellevue Healthcare Trust opens a strategic review after a stretch of poor returns and a smaller market value.
4. 30 October 2025: The board names Columbia Threadneedle and Kleyman, citing the strategy’s then-published record.
5. 4 to 6 March 2026: Shareholders pass the policy change, the manager starts on 5 March, and 40.9 percent of the share count is tendered.
6. June 2026: The first quarterly tender draws 17.6 percent of 55,522,399 shares; the trust buys the 15 percent cap.
7. August 2026: First interims under Kleyman carry the rates-and-inflation caution.
8. 2 September 2026: The second quarterly tender is undersubscribed at 8.4 percent of shares.

Selling has slowed. It has not stopped. James Carthew, who follows London investment trusts, said the discount had narrowed substantially, but that at £62.5 million “this is a trust that badly needs to expand to justify its existence.” Columbia Threadneedle already runs eight investment trusts with more than £9.5 billion of assets, a figure the firm dated to 5 March 2026, so the healthcare vehicle is a small line in a large listed shelf.

Sarah MacAulay became chair after the 28 April 2026 annual meeting, once Bolsover stepped aside because she also chairs another Columbia Threadneedle trust and could no longer be treated as independent of the new manager. The quarterly exit window remains. Month-end issuance is on the books if demand shows up above market size and at a price that does not dilute NAV.

The $10 million cheque in March 2024 is no longer the live question. Kleyman’s book has already been paid for the shorts it ran through the 2024-25 biotech slump and for the longs it held into the 2025 surge. The question the tenders keep asking is whether a sub-£100 million listed share class can hold that same book in public without shrinking every quarter.

Disclaimer: This article is news reporting and analysis of a fund launch, published strategy returns, and a London investment-trust vote, and it is for information only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any hedge fund, investment-trust share, or derivative. Readers should consult a qualified financial adviser or licensed investment professional before making any allocation or trading decision. Performance figures, asset totals, fees, and tender results reflect the company documents and market series cited and may change in later reports.