Rothschild Asset Management is raising money for a new type of fund, a publicly traded financing vehicle that will combine money with corporate management capabilities.

The International Biotechnology Trust plc plans to raise £100 million (about $155 million), with a cap of £150 million ($225 million), from international sources. That would give the fund the capability to invest $10-$20 million in each of 15-20 companies. Because IBT will be actively involved in its investments, it plans to keep its portfolio small.

If Rothschild's strategy is correct, IBT will lower its risk by proactively working to lower management risk by providing and paying for the expertise that is missing at companies. It will already have lowered technology risk, in theory, by investing primarily in later-stage companies that have established their scientific base.

Maturity brings needs

Starting in 1992, Rothschild began to think that a new type of fund was needed to meet the needs of biotechnology companies as they moved through the development process, according to Managing Director Jeremy Curnock Cook. London-based Rothschild was already managing another fund, Biotechnology Investments Ltd., which focuses on early-stage companies.