Investment Policy

Investment policy

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.

In connection with the investment policy, the following guidelines apply:

• The Company will not invest more than 10%, in aggregate, of the value of its gross assets in other closed-ended investment companies (including investment trusts) listed on the London Stock Exchange, except where the investment companies themselves have stated investment policies to invest no more than 15% of their gross assets in other closed-ended investment companies (including investment trusts) listed on the London Stock Exchange.

• The Company will not invest more than 15%, in aggregate, of the value of its gross assets in other closed-ended investment companies (including investment trusts) listed on the London Stock Exchange.

• The Company will not invest more than 15% of the value of its gross assets in any one individual stock at the time of acquisition.

• The Company will not invest more than 10% of the value of its gross assets in unquoted investments at the time of acquisition. This limit includes any investment in private equity funds managed by the Portfolio Manager or any affiliates of such entity.

• The Company may invest or commit for investment a maximum of US $15 million, after the deduction of proceeds of disposal and other returns of capital, in private equity funds managed by the Portfolio Managers, or any affiliates thereof.

• The Company’s borrowing policy is that borrowings will not exceed 20% of the value of the Company’s net assets. Any loan facility in place from time to time may be drawn by the Portfolio Managers overseen by the AIFM.

• The Company may be unable either to invest directly or invest efficiently in certain countries or share classes. In these circumstances, the Company may gain exposure by investing indirectly through swaps or other derivative instruments where it is more efficient to do so. Exposure to underlying investments thus obtained will count towards and be subject to the investment limits set out above. Further, where the Company invests via swaps or derivatives for such a purpose, exposure to these financial instruments will count towards and be subject to the limits on the use of derivatives and equity swaps set out below.

• In line with the investment objective, derivatives are employed, when appropriate, in an effort to enhance returns and to improve the risk-return profile of the Company’s portfolio. The Board has set the following limits within which derivative exposures are managed:

  • derivative transactions (excluding equity swaps) can be used to mitigate risk and/or enhance return and will be restricted to an aggregate net exposure of 5% of the value of the gross assets measured at the time of the relevant transaction; and

  • equity swaps may be used for efficient portfolio management purposes and aggregate net counterparty exposure through a combination of derivatives (as set out in the previous bullet point) and equity swap transactions are restricted to 12% of the value of the gross assets of the Company at the time of the transaction.