Brewin Dolphin Securities has linked up with Octopus Asset Management for the introduction of the bioscience venture capital trust (VCT).
This VCT invests in a portfolio of between 25 and 30 companies within the biotechnology sector. The portfolio will be made up of quoted companies in the UK and overseas, companies listed on Aim and Ofex, unquoted companies that are in the early stages of development and also those at the later stages.
Growth in the biotechnology sector is driven by the demands for medicines and new treatments from an ageing population that is living longer, so the outlook for investments is encouraging.
Most biotechnology companies emerge from academic institutions like university departments and this VCT will benefit in this respect from its appointment of Medical Marketing International (MMI) as technical adviser. MMI specialises in biotechnology investment and has established links with organisations like the NHS trusts and the Royal College of Surgeons. This network of contacts within the industry will help to assess investment opportunities.
Investors who are willing to take higher risks could find this VCT a worthwhile addition to their portfolio. However, the biotechnology sector requires a lot of funding and some companies may be struggling financially before they fully develop a new drug or make a medical breakthrough. Other companies may have fully developed treatments but these may not be approved, which could put setbacks in the way of this VCT.