LONDON: International Biotechnology Trust PLC announced Wednesday it has entered into an agreement with Schroders Capital to establish a partnership aimed at investing in unquoted biotechnology companies.
The new partnership is designed to provide the Company’s shareholders with long-term access to a diversified portfolio of earlier-stage, private biotechnology firms. The Company intends to make an initial commitment of £10 million, representing approximately 4% of its current portfolio value, to the partnership.
According to a Company statement, the investment will be committed over time to funds that focus on unquoted biotechnology companies. The Board stated the long-term objective is to create a portfolio diversified by underlying fund manager, investment vintage and geography.
The Company’s core investment policy is to achieve long-term capital growth through a diversified portfolio, primarily in the quoted biotechnology sector. Its policy allows for a limited exposure, between 5% and 15% of portfolio value, to unquoted companies. The Company’s current unquoted exposure is approximately 8.4%, which consists mainly of two funds managed by SV Health Partners. Those existing holdings, which have produced strong performance, will remain outside of the new partnership.
Schroders Capital brings more than 25 years of experience in the healthcare and biotechnology sectors, having committed over $4.3 billion across nearly 700 investments globally. The firm has established relationships with leading healthcare and biotechnology managers in North America, Europe and Asia.
Under the terms of the agreement, Schroders Capital will receive an annual management fee of 0.9% based on the asset value of the Company’s investment in the partnership, plus £25,000 per year for administration costs. The aggregate annual fees due to Schroders Capital are capped at 0.25% of the Company’s net asset value.
Schroders Capital stated it seeks to invest with biotechnology managers who have proven track records, strong scientific expertise and access to opportunities that can improve global healthcare outcomes.
International Biotechnology Trust PLC is an investment trust with a primary objective of achieving long-term capital growth by investing in a diversified portfolio of companies in the biotechnology sector.
Schroders Capital is the private markets division of Schroders Group, offering a range of investment strategies including private equity, insurance capital, and securitized products.