International Biotechnology Trust Plc (LON:IBT) was established in 1994 to provide institutional and retail investors with the opportunity to participate in global biotechnology and life science companies, from early-stage development via venture capital (SV Health Investors funds) through to global, multinational biotechnology companies. The main aim of the trust is to generate capital growth, while minimising risk, through a diversified portfolio and with an experienced investment management team. Over the last five years, IBT’s NAV has increased 62%, while the share price has increased 92% over the same period – the superior returns generally reflected by a share price premium.
- Strategy: IBT’s investment objective is to achieve long-term capital growth by investing in biotechnology companies that address unmet medical needs. The trust offers a diversified portfolio of listed and private companies on a global basis, although the vast majority of investments are currently in the US.
- Market updates: With 89% of the investment portfolio currently in listed companies, the NAV changes on a daily basis. IBT has a daily update on its website, produces informative monthly factsheets (https://ibtplc.com/investor#
factsheets), and shows the full portfolio of US listed investments quarterly in filings with the SEC (https://ibtplc.com/portfolio).
- Portfolio management: The experienced team at SV Health Managers LLP was appointed investment manager of the trust on 1 January 2005. Recent evolution within the team has seen the promotion of Ailsa Craig and Marek Poszepczynski to co-lead managers; both bring specific industry expertise.
- Risks: Risk is minimised through portfolio diversification, geographical spread and active specialist investment management. In addition, many valuation inflection points in the drug industry are around the time of binary outcomes (e.g. clinical trial results), so the trust aims not to be holding an overweight position in the shares of companies around such time points.
- Investment summary: International Biotechnology Trust provides investors with the opportunity to participate in the drug industry, from early-stage development through to full commercialisation of regulatory approved drugs. The focus is on companies that address unmet medical needs. The five-year CAGR in NAV has been 7.0%, and the trust pays an annual dividend of 4% of NAV at the preceding year-end (CAGR 5.4%).