Asian investors warm to record US$471 million cancer fund
UBS Wealth Management
has raised a record US$471 million from investors in its UBS Oncology Impact Fund, an innovative financial vehicle with a projected internal rate-of-return of up 20 percent that will invest cash into early stage oncology research and medical treatment in developing countries in Asia. A sharp rise in the spread of cancer among Asia’s ageing populations, which could reach 10.6 million cases by 2030, has prompted interest in finding new treatment methods and cures within the region and is reflected in the fact that over 60 percent of the fund’s assets reportedly came from investors in Asia. “[The] notion that impact investing doesn’t work in Asia, I think is completely debunked,” said Simon Smiles, Chief Investment Officer for UBS Wealth Management’s Ultra High Net Worth practice. “If you have [an] investment opportunity that has a strong positive social impact, it clearly resonates in Asia.” The unique fund will be managed by
MPM Capital
, a US-based investing firm that works with leading scientists to address unmet needs in the field of medicine, and will take a slightly different approach to orthodox impact investing, where funds are expected to create direct social and environmental benefits. Instead, the UBS Oncology Fund will be split between cancer treatment and early stage biotechnology companies whose work it is to find a cure for cancer. Grants for academic research will be funded by 20 percent of the performance fee and 1 percent of royalties on any new drugs that come to the market. Through the fund, UBS’ private investors will also be able to gain unprecedented access to early stage investments that they might not otherwise have access to, through coordinated investments in private and public companies alongside a US$400 million BioVentures fund that MPM Capital set up in 2014. Elsewhere, the issue of technology transfer to cancer treatment centres may be another area for future impact investment funds after a spokesperson for the Government of Uganda said that the country’s only functioning cancer treatment machine was damaged beyond repair, and that another machine cannot be used because of delays in the allocation of US$9 million for the construction of a medical building to house it.
By Adam Pitt
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Photo: UBS