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T. Rowe Price Health Sciences Fund, Inc. manager change & hedge fund manager on 4/10/13

497 1 hsfhsphsvsticker21413-20131.htm
T. Rowe Price Health Sciences Fund

T. Rowe Price Health Sciences Portfolio

T. Rowe Price Health Sciences Portfolio-II

Supplement to Prospectus dated May 1, 2012
In section 1, the portfolio manager table under “Management” is supplemented as follows:

Effective February 15, 2013, Taymour R. Tamaddon will replace Kris H. Jenner as the fund’s portfolio manager and Chairman of the fund’s Investment Advisory Committee.

In section 3, the disclosure under “Portfolio Management” is supplemented as follows:

Effective February 15, 2013, Taymour R. Tamaddon will replace Kris H. Jenner as the Chairman of the fund’s Investment Advisory Committee. Mr. Tamaddon joined the Firm in 2004 and his investment experience dates from 2003. Since joining the Firm, he has served as an equity research analyst covering the healthcare industry.

The date of this supplement is February 14, 2013.
F114-041 2/14/13



    From T Rowe Price's web site:

    Fund Manager
    Taymour R. Tamaddon
    Managed Fund Since: 02/15/2013
    Joined Firm On 05/19/2004*
    B.S., Cornell University, M.B.A, Tuck School of Business at Dartmouth

    *Firm refers to T. Rowe Price Associates and Affiliates

  • Reply to @TheShadow: Thanks for the heads-up. I'll be watching the manager change with keen interest. I've held PRHSX for over ten years and it is my largest mutual fund position
  • If this wasn't announced before, it's really unusual for TRP ... they normally plan & announce manager changes well in advance, as they've done in recent times with PRNHX and the Spectrum funds.
  • Reply to @TheShadow: Great job Shadow !! Except for the small mention on the TRP Website, that you linked, you scooped all other news sources by hours. It will be interesting as to why Jenner left.
  • An alternative suggested to me by my advisor at ML is PHSZX, I was surprised I was not familiar with it, good alternative to the TRP fund, which I just recently bought. My concerns about the TRP fund is if people decide to exit quickly, some stocks may have to be sold to cover redemptions, plus we virtually know nothing about the new manager's style or past history on which to judge him. History generally tells us not much portfolio changes happen immediately, but something to watch over time. Unwinding positions too fast can cause dramatic changes in the stock price if the new manager does not like the portfolio mix, etc.
    Lets hope it can continue to be the great fund it has always been. If not, I have this other fund as a replacement in mind. I also have positions in FBTIX and FSPHX that cover this sector.
  • PHSZX is closed to new investors, I believe.
  • Reply to @slick: FYI: Other Health Care Fund choices.
  • Reply to @andrei:
    According to ML it is available, did not see anything on the website for the fund either that indicated it had closed. Hope its still open.
  • Reply to @Ted: Thanks Ted, lots of choices to review:)
  • Reply to @andrei: Thanks Andrei, looks like I will have to investigate further.
  • FYI: Taymour Tamadden, the new manager, survived the first day. PRHSX was up .07 or .16% today
  • For my money, which ain't saying much, fund firms (TR, Oakmark, Marsico) come to mind) should tell investors the real reasons for prominent managers' departures. I'd be more inclined to leave my $$ with the firm if it said, "He got greedy and we wouldn't match his demands," or "We could not keep someone whose management style departed dramatically from our own." Everyone leaves, "To pursue other interests," even if they are sleeping in and buying magazines from the kids who come to the door.
  • Reply to @BenWP: Hi, Ben. I'm very sympathetic to your curiosity. Occasionally you can get pretty close to the truth (as when the guy with the enormous ego knows that he can go from a mere millionaire to fantastically rich, snags four analysts and walks or following a merger, 30% of the managers become surplus), but mostly neither party will say - even off the record.

    I'll write a bit about what we know concerning Jenner's departure in our March issue. The highlights: he hired a p.r. firm, reached out to all of his contacts in the industry, took his top two (of eight) analysts, mentioned that for "regulatory" reasons he can't say anything more and he declined to tell folks at Price what we was doing.

    My guess would be a venture capital fund or something similar, motivated both by the prospect of wealth and supporting exciting developments in biotech.

  • I was able to buy into PHSZX, since Institutional shares were available thru my advisor at ML. Decided to trade out of PRHSX due to recent changes. I have always been a big fan of T Rowe Price Funds, but I think a new manager will have to prove what they can do. I am fully expecting former manager will show up after 6 months or so in a new registration somewhere else or on his own with his analysts in tow.
  • Just in case you folks were wondering, I'm the reason Kris Jenner decided to leave the T Rowe Price Health Sciences fund. Here's how it happened...

    Late last year, I was analyzing my position in the Vanguard Healthcare fund (VGHCX) against PRHSX. I decided that while VGHCX was an excellent fund with a great long-term record, PRHSX was noticeably better. And since Ed Owens announced his retirement plans, it was a good time to switch. So I sold VGHCX last September, and started establishing a position in PRHSX in January 2013.

    So there you have it! My timing is spot-on once again.
  • Reply to @randynevin: LOL - I could suggest a few more you should buy then (-:
  • Reply to @David_Snowball: I agree with your assessment on Jenner's future. That is one of the risk of active managed funds and the key personnel moving on elsewhere.
  • randynevin, what are you planning to buy next?
  • Reply to @AMatMFO: I will stay the course (continue building the PRHSX position), and watch it closely to see if the manager departure has a significant effect. T Rowe Price is a big enough firm they can throw plenty of analyst support at the fund to mitigate it. If it turns sour and there are no good alternatives, I might just close out that position. I will give it at least a year, though, to prove itself. Maybe a couple, as it's a sector bet.
  • Anything latest on where Kris Jenner is landing ?
  • David,

    Have you heard anything about Kris Jenner ?

  • Reply to @mrc70: According to the NY Times only that he is pursuing a new investment venture with two of his former analysts.
  • edited April 2013

    Jenner Said to Raise $100 Million for Health-Care Fund
    By Christopher Condon - Apr 10, 2013 12:25 PM ET

    Kris Jenner, the former top stock picker at T. Rowe Price Group Inc., has raised more than $100 million for a hedge fund to invest in health-care and biotechnology stocks, according to a person with knowledge of his plans.

    Jenner will start the fund, named Rock Springs Capital and based in Baltimore, later this year and is continuing to seek commitments from investors, said the person, who asked not to be named because the information isn’t public. Jenner will run the fund with Mark Bussard and Graham McPhail, former T. Rowe Price analysts who left with Jenner in February, the person said. Jenner declined to comment on the fund.

    Jenner, 51, had run T. Rowe Price’s $5.8 billion Health Sciences Fund (PRHSX) since 2000 and beat 83 percent of peers in the five years before he left, according to data compiled by Bloomberg. The fund was T. Rowe Price’s best performer during that period, returning an annual average 13 percent.

    “What’s distinctive about Kris Jenner is not just his medical and scientific background, but also his ability to connect the dots and see how different information is related,” Leonard Bell, chief executive officer of Cheshire, Connecticut- based Alexion Pharmaceuticals Inc. (ALXN), said in an interview.

    Jenner held Alexion shares for more than a decade. T. Rowe Price was Alexion’s second-biggest shareholder with a 9.5 percent stake as of Dec. 31, according to regulatory filings.

    Medical Degree
    Jenner earned a medical degree from Johns Hopkins University School of Medicine in Baltimore, then a Ph.D. in molecular biology from Oxford University in England. He graduated summa cum laude from the University of Illinois at Urbana-Champaign, where he was a backup quarterback on the school’s football team.

    He joined T. Rowe in 1997 and took over the Health Sciences Fund in 2000. He has a reputation for finding lesser-known pharmaceutical and biotechnology firms developing innovative therapies, Christopher Davis, an analyst at Chicago-based fund research firm Morningstar Inc. (MORN), said in an interview after Jenner’s departure from Baltimore-based T. Rowe Price.

    Jenner’s is raising money following a period of strong returns for the health-care industry, according to Andrew Berens, a senior biotechnology analyst at Bloomberg Industries in Skillman, New Jersey. U.S. health-care stocks, as measured by the Standard & Poor’s 500 Health Care Index, have gained 36 percent since the end of 2011, compared with a 26 percent increase in the Standard & Poor’s 500 Index.

    “Health care is the hottest new launch sector we see,” Omeed Malik, head of the emerging-managers program that advises fund start-ups at Bank of America Corp.’s Merrill Lynch in New York, said in an interview.

    Short Sales
    Rock Springs Capital will have significantly the same investing strategy as his former fund at T. Rowe Price, the person said. Moving to a hedge-fund strategy will give Jenner the ability not only to invest in companies he believes will rise in value, but also to bet against companies he believes will fall, a practice known as short selling. Most mutual funds aren’t allowed to short stocks.

    Hedge funds typically charge clients about 2 percent of assets annually and 20 percent of profits. Jenner’s former mutual fund charges shareholders 0.84 percent annually, according to data compiled by Bloomberg.

    T. Rowe appointed Taymour Tamaddon, formerly an analyst at the firm, to replace Jenner as manager of the Health Sciences Fund.

    To contact the reporter on this story: Christopher Condon in Boston at [email protected]

    To contact the editor responsible for this story: Christian Baumgaertel at [email protected]

    ++++Wonder if Ted is going to invest with Kris Jenner now?++++
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