# International Biotechnology Trust: M&A activity on the rise

- Link: https://www.directorstalkinterviews.com/international-biotechnology-trust-ma-activity-on-the-rise/4121070763
- Published: 2022-06-30T07:52:41+01:00
- Author: Amilia Stone

**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 venture-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 an experienced investment team. Over the
last five years, IBT’s NAV per share has increased 25%, while the share price has
increased 32% over the same period – the superior returns generally reflected by
a reduction in the share price discount.

 * **Strategy:** International Biotechnology Trust’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 (88%) of 
   investments are currently in the US.
 * **NAV updates:** With ca.90% of the investment portfolio in listed companies,
   the NAV changes on a daily basis, which is updated on IBT’s website. The company
   also produces monthly factsheets, which highlight portfolio changes and update
   the NAV (https://ibtplc.com/investor#factsheets). The managers also publish an
   informative topical blog each month (https://ibtplc.com/investor#investment-blog).
 * **Portfolio management:** Over the past six to nine months, the valuations of
   biotech companies have been correcting. In anticipation of this, the managers
   increased their holdings in the safer mega-cap companies and reduced exposure
   to the small- to mid-cap companies. Now that valuations have become more reasonable,
   the managers have been reversing these positions, as they see superior growth
   and increased potential for M&A in these smaller companies.
 * **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 to reduce the fund’s exposure
   to such events that it considers binary.
 * **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 4.6%, reflected in the share price CAGR of 5.7% over the same period, and
   the trust pays an annual dividend of 4% of NAV at the preceding financial year-
   end.

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