UBS clients raise $650 million for biggest yet biotech impact fund By Reuters
Brenna Hughes Neghaiwi
ZURICH (Reuters – UBS has raised $650m for its largest biotechnology impact fund, according to the Swiss bank.
The term “impact investing” was first used in 2007. It is a way to incorporate philanthropic objectives into financial portfolios.
Impact investments are not only about financial returns but also aim to have measurable social and environmental impact. They often align with United Nations Sustainable Development Goals, which go well beyond basic principles of sustainable investing.
MPM Capital has managed the Oncology Impact Fund 2 since its inception. This includes $650 million from UBS clients. It plans to invest at least 80% in privately-held start-ups while the remaining 20% will go into public companies developing new treatments for serious diseases.
Christiana Bardon, portfolio manager, stated that twenty percent of the management fees and a percentage of drug royalty payments will go to children with cancer in developing countries.
This fund is in addition to the predecessor fund that MPM and UBS raised $470m for their wealth management. It marks the Swiss bank’s biggest single theme-focused impact investing fundraising.
With this fund, it feels like we tried to redefine the impact space. This vision is very bold. It is to say that for every drug developed and sold, 1% of the proceeds would be donated to making the world a better place. Mark Heafele is chief investment officer at UBS Wealth Management.
The initial focus of impact investing, which was originally about impact bonds at $5 million per annum when we embarked on our journey, was to create impact bonds. He said that launching something 100 times as large was a huge feat and shows that this theme resonates strongly with clients.”
UBS was the largest wealth manager in the world and had $6.9 Billion of SDG-related investments raised by end 2020. The company aims to increase its invested capital by $70 billion, categorized as either impact investing or sustainably focused investments. This is through 2025.
Although impact investing is often associated with low returns, managers stated that investors, which can include insurers, large corporations, and wealthy people, would be able to continue receiving returns based upon the performance of previous funds.
Ansbert Gadicke (MPM) stated that the impact fund was as profitable and as successful as any of our funds. He also said they were generally among the top performers with U.S. venture capital.
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