Investment Objective and Policy

The Biotech Growth Trust seeks capital appreciation through investment in the worldwide biotechnology industry. In order to achieve its investment objective, the Company invests in a diversified portfolio of shares and related securities in biotechnology companies on a worldwide basis. Performance is measured against the NASDAQ Biotechnology Index (sterling adjusted).

Investment Approach

The Company‘s assets are managed by OrbiMed Capital LLC (“OrbiMed”). OrbiMed, based in New York, is an investment manager focused exclusively on the healthcare sector, with approximately U.S.$11billion in assets under management as at 31 March 2014 across a range of funds, including investment trusts, hedge funds and private equity funds. OrbiMed’s investment management activities were founded in 1989 by Mr. Samuel D. Isaly.

OrbiMed has invested the Company’s assets in the worldwide biotechnology industry.

Geographic allocation is in line with the geographic distribution of investment opportunities, with the majority of the Company’s investments in companies based in North America. The portfolio comprised 46 holdings as at 31 March 2014 (2013: 38 holdings).

OrbiMed takes a bottom-up approach to stock selection based on intensive proprietary research. Stock selection is based on rigorous financial analysis, exhaustive scientific review, frequent meetings with company management and consultations with physicians and other industry experts.

OrbiMed looks for strong management teams, healthy organic growth from current products and deep pipelines to fuel future growth.

Risk management is conducted via position size limits and geographic diversification. The Company maintains adequate portfolio liquidity by limiting the Company’s ownership to 15% of an individual company’s equity (at the time of investment) and by strictly limiting the Company’s exposure to direct unquoted companies to 10% of the portfolio at the time of acquisition.