Schroder's plans for IBT
Rothschild Asset Management no longer holds the strings to International Biotech Trust (LSE:IBT). Last week, the biotech investment company appointed Schroder Ventures, the private equity group, as investment advisers and overseers to the trust's administration.
The move comes after a summer in which IBT succumbed to calls from Millennium Offshore Partners to return cash to the shareholders. Kate Bingham, general partner of Schroder Ventures Life Sciences (SVLS), told Ebb & Flow that "the trust plans to return 50 percent of its net value." The cash will come from the 100 million ($145 million) in IBT accounts earned from recent divestments including MorphoSys (NMarkt:MOR), Medarex (MEDX), and Cubist (CBST). Further cash will be gleaned from sales of minor positions in non-core investments, such as Amgen (AMGN) and Biogen (BGEN). Millennium Partners held an 11.2 percent interest in the trust at Nov. 3, when the trust's diluted net asset value stood at 401.66p per share.
Bingham plans to make the Trust more pragmatic by enabling it to exit investments earlier than it has in the past. In these terms IBT is looking at options that could include stopping the fund's practice of taking board seats in many of its companies, or stepping down from current board seats, or even introducing a policy of not taking board seats. "Many of the past problems for IBT centered around not being able to exit from companies due to IBT's board position," said Bingham. "Previously, in some stocks that have been fully valued IBT should have been able to exit, but the Trust's board position made this difficult."
The majority of IBT's investments are in publicly quoted biotech companies in the U.S. and