You would usually want a qualified doctor to look after your health rather than your wealth, but Doctor Carl Harald Janson is the exception.
For the past 13 years, Janson, who qualified as a medical doctor 38 years ago, has devoted his working life to investing in healthcare companies on behalf of a variety of investment houses.
Since late 2013, he has been lead manager on International Biotechnology, a £230million investment trust investing in a portfolio of biotechnology and life science companies. His track record is impeccable.
Over the past five years, the trust has delivered a return of 146 per cent.
To put this in perspective, the FTSE All-Share Index has returned 30 per cent over the same period.
While Janson accepts that such stunning numbers may not be repeated – and admits the economic backdrop is a challenging one – he is confident the biotechnology sector offers long-term investors ‘exciting’ growth prospects.
‘The trust was launched a quarter of a century ago,’ says Janson.
‘Then the risk profile was higher because essentially the fund was investing in start-up businesses, some of which did not survive. Now, the biotechnology universe is a more diverse one, comprising some 500 firms we are interested in, many of which are well-established. That in turn has made the investment area more cornerstone than peripheral. ’
Janson believes an ageing world population will fuel ever higher healthcare spending which in turn will increase the demand for new drugs from leading biotechnology companies.
To back his point, he says that last year a record number of new drugs were approved by the Food and Drug Administration in the US, while clinical trials of new drugs worldwide rose to a record 31,000. All good signals, according to Janson.
Given most biotechnology companies are based in the US, the trust’s portfolio is dominated by US companies such as Gilead, a pioneer in the treatment of HIV.
‘It’s a disease that will not go away,’ says Janson, ‘and Gilead is a leader with a pill called Genvoya.’ It is the trust’s biggest holding at just over seven per cent.
Janson likes companies such as Gilead whose new drugs are hard to beat by rivals or which are operating in specialist areas where competitors are few and far between.
Another such company – a top ten holding – is Stemline Therapeutics, which late last year had a drug (Elzonris) approved by the FDA for treating an aggressive cancer that attacks the bone marrow.
Since the turn of the year, Stemline’s share price has risen by more than 50 per cent although the company is still making losses.
Janson runs the trust on behalf of SV Health Managers, a leading healthcare and life sciences investment house with offices in Boston and London.
To take full advantage of SV’s specialism, the trust not only holds more than 60 listed companies and some 13 unquoted stocks, but it also has a stake in one of the firm’s venture capital funds (SV Fund VI) which in turn invests in start-up biotech companies. In the next three years, Janson wants to shift the portfolio so that it is just built around holdings in listed businesses and the company’s venture capital funds.
The investment trust pays shareholders an annual income of four per cent from the profits it makes on its investments.
SV Health Managers also manages a £250million venture capital fund which aims to invest in companies intent on discovering breakthrough treatments for dementia.