ZURICH, Oct.6 (Reuters) – High net worth clients of UBS (UBSG.S) have raised $ 650 million for the largest biotech impact fund ever, the Swiss bank said on Wednesday.
Impact investing – a term coined in 2007 – arose out of the desire to extend philanthropic goals to major financial holding companies.
Along with financial returns, impact investing aims to generate measurable environmental and social impact, often in line with the United Nations Sustainable Development Goals (SDGs), which typically go beyond basic principles of sustainable investing.
Oncology Impact Fund 2, managed by biotech investment firm MPM Capital, raised a total of $ 850 million, including $ 650 million raised from UBS clients. It will invest 80% of its capital in private start-ups and the rest in public companies developing innovative treatments against cancer and other serious diseases.
Twenty percent of the performance fee that managers earn on their investments, along with a portion of drug royalties, will be donated to improve access to cancer treatment for children in developing countries and to fund research. against cancer, said portfolio manager Christiana Bardon.
Together with its predecessor, for which MPM and UBS wealth management raised more than $ 470 million in 2016, this is the Swiss bank’s largest thematic impact investment fundraising to date. .
“With this fund, I feel like we’ve tried to reinvent the impact space. The vision here is still extremely bold, that is to say: what if every drug developed and sold had this 1 % back to make the world a better place? ” Mark Heafele, chief investment officer of UBS Wealth Management, said.
“When we started this journey, impact investing was about impact bonds and at the time, they were made in $ 5 million increments. Launching something that is 100 times bigger was very ambitious and shows how this theme clearly resonates with our customers, ”he added.
UBS, the world’s largest wealth manager, had raised $ 6.9 billion for impact investments linked to the SDGs by the end of 2020. It aims to add $ 70 billion in invested assets classified as investment impact or as investments focused on sustainable development more generally until 2025.
While impact investing has often been associated with concessional returns, managers said investors – which include large corporations, insurers and other very wealthy people alongside UBS clients – don’t would not need to forgo returns, based on the performance of the previous fund.
“Our impact fund is as profitable as our other funds, and they are generally the top performers in the US venture capital quartile,” said MPM chief executive Ansbert Gadicke.
Reporting by Brenna Hughes Neghaiwi; Editing by Steve Orlofsky
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