Connecture Inc (CNXR), Hyperion Therapeutics Inc (HPTX): Top 5 Healthcare Picks of Great Point Partners

Jeffrey Jay and David Kroin’s Great Point Partners is one of the newer funds we track at Insider Monkey, and we’ll cover the healthcare-focused fund’s top picks for the first time. The fund had an equity portfolio valued at $207.76 million at the end of the year, which consisted of 27 long positions, and one put position, and $936.83 million in assets under management.

Great Point Partners was founded in 2003, and has a long history of investing in both public and private healthcare companies, providing them with the financing and insight needed to maximize their operations as well as shareholder value. The fund has invested more than $1 billion in more than 100 healthcare businesses since its inception. Great Point is also unique in that a bigger portion of the fund’s investment, 8%, comes from the fund’s own partners, compared to just 1% of a typical private equity firm’s investment. Thus the partners are just as invested in the company as its own investors are.

Great Point’s top pick is Connecture Inc (NASDAQ:CNXR), a new position for the fund in the fourth quarter, as the web-based platform of health insurance went public in December. Great Point was an investor in Connecture while the company was still private, recapitalizing them in August 2012 as Connecture was on the verge of drastically ramping up its services thanks to the implementation of the Affordable Care Act. Connecture CEO Doug Schneider described the partnership as invaluable.

“The Great Point team has the health care information technology and payer sector domain expertise to complement and support our strategic vision as a company. They were able to bring value immediately, most notably with the sourcing and execution of DRX on very favorable debt financing terms,” Schneider said.

Connecture Inc (NASDAQ:CNXR) priced its IPO of 6.64 million shares at $8.00 each, and shares are up just over 10% since, at $8.81 in afternoon trading Monday. Connecture releases its fourth quarter and full-year earnings results on March 10. Connecture was a popular stock among hedge funds we track, with 13 opening new positions between the IPO and the end of the year, though the majority of them were small. The largest such position after Great Point’s was that of Jeremy Green’s Redmile Group, which held 943,000 shares.