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Bacteria Germ infection and bacterial disease epidemic
Bacteria Germ infection and bacterial disease epidemic

Performance

Past performance is not a guide to future performance.

Investment Objective and Strategy

The Trust's investment objective is to achieve long-term capital growth by investing in biotechnology and other life sciences companies addressing an unmet medical need.

A diversified portfolio

The Trust will seek to achieve its objective by investing in a diversified portfolio of companies which may be quoted or unquoted and whose shares are considered to have good growth prospects, with experienced management and strong potential upside through the development and/or commercialisation of a pharmaceutical product, device or enabling technology.
Investments may also be made in related sectors such as medical devices and healthcare services.

Quoted and unquoted investments

While the Trust's portfolio is held as one pool of assets, for operational purposes there is a quoted portfolio and an unquoted portfolio. The quoted portfolio makes up the majority of the Trust’s asset pool and comprises investments made into listed companies. The unquoted portfolio may comprise investments made into unquoted companies and into funds not quoted on a stock exchange, including venture capital funds. This may include funds managed by the Investment Manager and/or members of its group.

Geographic diversity

The portfolio is diversified by geography, industry sub-sector and investment size with no single investment in a company accounting for more than 15% of the portfolio at the time of investment.
The portfolio is split between large, mid and small capitalisation companies, primarily quoted on stock exchanges in North America, where the most established and commercial biotech and other life sciences companies and companies operating in related sectors are based, though investments can also be made in Europe, Asia and Australia.

The Trust may invest through equities, index-linked securities and debt securities, cash deposits, money market instruments and foreign currency exchange transactions. Forward or derivative transactions are not used by the Trust.

The Trust may, from time to time, borrow funds to take advantage of specific investment opportunities, rather than to apply long-term structural gearing to the Trust's portfolio of investments.

Investment Process

The Trust's Investment Managers apply a rigorous bottom up approach to the investment selection process, with a top down overlay to ensure diversification. Investments are purchased with the intention of achieving long-term capital growth. However, portfolio composition is adjusted on a regular basis in line with the Trust's risk mitigation strategy.

Investments are selected after a thorough, multi-stage due diligence process which includes idea generation through the attendance of conferences and one-on-one meetings, analysis of a company's financial stability and liquidity situation as well as a review of a company's executive management's experience and expertise. The investment manager seeks out companies that address an unmet medical need, have a single/wholly owned asset, or own a monopoly position in its market. Detailed financial models are created by the team to assess the reasonableness of a company's valuation with the aim to seek out well financed, cash generating, attractively valued investment opportunities.

Investment Process Graphic
Human cell under microscope

Investment Restrictions

The Trust observes the following investment restrictions:

  • Focus The Trust will invest primarily in biotechnology and other life sciences companies that are either quoted or unquoted
  • 15% Initial Cap The Trust will not invest more than 15% in aggregate, of the value of its gross assets in any one individual company at the time of acquisition
  • Majority Quoted The great majority of the Trust's assets will be invested in the quoted biotechnology sector with a global mandate across the entire spectrum of companies
  • 30% Gearing Gearing is restricted to 30% of the Trust's net asset value
  • 15% Total Cap The Trust will not invest more than 15% in aggregate, of the value of its gross assets in other closed-ended investment companies quoted on any stock exchange

No material change will be made to the investment objective or policy without the approval of shareholders by ordinary resolution.

Frequently Asked Questions

The answers to a number of frequently asked questions can be found here, should you have any further questions please get in touch with us IBT-IR@svhealthinvestors.com. The FAQs are provided for informational purposes only and are not an invitation or recommendation to invest in IBT. Past performance is not a guide to future performance.

What are the benefits of the unquoted portfolio?

By investing in unquoted companies, the Trust allows investors access to the full spectrum of the healthcare & biotechnology sector and allows investor exposure to otherwise inaccessible investments, especially venture funds. The unquoted portfolio provides additional diversification to the Trust’s portfolio and reduces volatility in the Trust’s net asset value during periods of extreme market volatility.

How often is the unquoted portfolio revalued and what triggers revaluations?

In the ordinary course of business, the Trust’s unquoted portfolio is revalued once a quarter. The Fund Manager continually monitors the business and economic activities of each unquoted holding and will perform an intra-period revaluation if required.

Have there been any write-downs in the unquoted portfolio since 31 August 2019?

A minor holding of £110k was written down to zero based on negative data during the six months ended 29 February 2020.

What are the benefits of investing in unquoted holdings through a venture fund?

In addition to the benefits received by investing in an unquoted portfolio, investing through a venture fund grants investors access to the skills and expertise of the venture fund’s Managers. Investors will also have access to a broader spectrum of investments per unit of invested capital.

How big is the Trust’s investment in SV Fund VI?

As at 29 February 2020, the Trust’s investment in SV Fund VI amounted to £19.9 million, which represented 8.2% of the Trust’s net asset value.

The Trust made a commitment of $30 million to the fund on 19 October 2016, equivalent to 7.5% of the fund’s total commitments at that date, which will be drawn down over the life of the fund. The amount invested as at 29 February 2020 represented 71.3% of the $30million committed capital. The Board expects the unquoted portfolio (including both SV Fund VI and directly-held unquoted holdings) to remain within the guideline range of 5-15% of total net asset value at date of investment.

Does IBT make any more direct investments into unquoted holdings?

In 2016, The Trust’s Board took a decision to no longer make direct investments into new unquoted holdings. Instead, to allow a concentrated holding with broader investment exposure and diversification, the Trust continues to access unquoted holdings by investing directly in a venture capital fund, SV Fund VI.

Disclaimer

The information on this website may only be suitable for certain types of investors and is not intended to be used or relied upon by any other person.

An investment with IBT may contain significant risks and is intended only for sophisticated investors who meet certain eligibility criteria.

The material on this website is intended to be viewed only by persons resident in the EEA.

The information on this website is not an offer to sell or a solicitation of an offer and does not constitute investment advice.

No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained therein.

The information on this website may constitute financial promotion for the purposes of the Financial Services and Markets Act 2000 (“FSMA”).


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