British Patient Capital launches £600m life sciences programme

BPC has £200m to commit to the strategy, with a further £400m expected to come from private investors. A spokesperson for BPC told Unquote that BPC expects to see a broad range of institutional investors committing to the strategy.

The spokesperson added that there are diversification benefits for investors committing to the life sciences strategy, noting that healthcare tends to be paid for predominantly by governments and insurance companies rather than consumers, meaning that the sector is insulated from economic cycles.

BPC will partner with the Mubadala Investment Company as part of the programme.

BPC is a commercial subsidiary of the British Business Bank and was launched in 2018. The firm had made commitments of more than £150m to UK life-sciences-focused funds from its £2.5bn investment programme prior to launching its specialised strategy, according to a statement.

Asked about the rationale behind launching the strategy, the spokesperson said: "There is a well-documented lack of later-stage capital for innovative UK life sciences companies. In UK biotech, the amount of early-stage funding available is 3.3x that of late-stage, compared to 2.7x in Europe, and 1.9x in the US."

The spokesperson added that the British Business Bank’s UK Venture Capital Financial Returns 2020 report shows that the DPI (distribution to paid-in) multiples of UK life science funds are slightly ahead of other funds. They said that this finding challenges the perception that life sciences funds take longer to generate returns, highlighting the commercial opportunity that lies in investing in the sector.

BPC is seeking managers with a relevant and verifiable track record in late-stage life sciences investments. "This includes in growth stage funding for the life sciences sector," the spokesperson said. "Ideally, the management team will be able to demonstrate a track record of working together to execute a similar investment strategy."

The programme will also welcome applications from international fund managers that fulfil certain criteria and have a clear focus on the UK life sciences market. "International fund managers should either already have a permanent UK office, or commit to opening such an office, with a minimum of one full-time partner level resource to be located at that office, during the life of the fund," the spokesperson told Unquote.

The vehicle will make cornerstone commitments to later-stage life-sciences-focused venture and growth funds. The strategy will back funds with a minimum target of £250m, making commitments of £50-100m per fund.

BPC said in a statement that global challenges – including the Covid-19 pandemic, ageing populations and the provision of sustainable healthcare – are driving the UK market. Its strategy aims to support UK-based life sciences companies in fulfilling their potential.

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