Our investment decisions are based on thorough research and fundamental analyses. In the biotech sector such an analysis especially encompasses product portfolio patent protection, product development risks, market entry barriers, competition and the expected market development. But perhaps even more vital to our process are the serious efforts we undertake to understand the strengths and weaknesses of a company’s management, team dynamics, and their view on the future of the company and the markets they serve.
We believe companies can truly make a difference if their products differentiate themselves from their competitors. We do not invest in me-too-products; instead we actively look for companies which develop next-generation medicines with a unique selling point that puts them ahead of competition.
In our experience a management team with the right characteristics consistently outperforms the market. To that end we look for outstanding and ambitious management teams with a good track record.
We only invest in those companies that are actively looking to expand their business in terms of in- or out-licensing opportunities around their pipeline. These efforts do not only drive growth, they also reduce the company’s exposure to risk.
Our focus is on the highly specialized Life Science market, a market we understand due to our team’s decades of expertise in the field. Within this focused approach, we diversify over diseases, geographies and stages of company development to limit risk.
We identify those companies that meet the above criteria and are trading at a significant discount to their intrinsic value, from a pool of over 600 listed Life Science companies in Europe and the U.S. We believe in our ability to consistently outperform the market by investing in a focused portfolio (15-20 companies) of undervalued companies only.
We actively monitor the companies that we identify as high potential. We then invest in companies that meet our calculated ‘entry prices’ and sell companies which have reached our re-balance price. This disciplined buy and sell approach allows us to make rational decisions, thereby avoiding the risk of going along with a bubble, while making a significant return and at the same time invest in medical treatments that make a difference.
We focus our efforts on finding future outperformers to maximize our returns. Rather than spreading our portfolio over a large number of investments, and losing sight over individual investments, we hold a concentrated portfolio in which we only invest in 15-20 companies at a time. This ensures we are consistently on top of developments as they occur within each of our chosen companies.
A stringent approach and staying true to our values has been the basis that led to our consistently profitable track record investing in medical companies. Our confidence in our unique strategy is reflected by our team members, most of whom have themselves invested seriously in our fund, with a current exposure of around €20 million.