UBS raises $471M for a new kind of cancer research fund

Handshake

As former Facebook presidents and current U.S. vice presidents can build up new “moonshot” funds toward curing cancer, the Swiss wealth management company UBS thought it might get in on the act.

The investment firm announced today that it has raised $471 million for the final closing of the UBS “Oncology Impact Fund”--an investing initiative aimed at developing new cancer treatments.

The money will be injected into early-stage oncology research in an effort to speed up the development of new cures. Its idea of “impact investing” aims to generate a “defined positive social impact”--as well as a competitive return.

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UBS said it is also an attractive area for investors as there is a highly significant source of capital for oncology--and is of course why so many cancer biotechs have managed to raise major VC sums in recent years.

In addition to investing in early-stage cancer treatments, the new Fund will also support academic research and help fund better access to cancer care for children in the developing world.

A portion of any performance fees generated and half of a royalty attached with best efforts to all successful drugs sales will be managed by UBS Optimus Foundation.

The other half of the royalty amount will be spent on academic grants to promising oncology-related research. Half of the funds’ investors were in Asia, UBS said, adding that participants have agreed to lock up funds for five years and make a minimum $500,000 investment.

The firm will work with Boston-based MPM Capital to identify investment targets. It plans to make between 10 to 20 investments over five years, with initial investments around $10 million. Promising compounds or projects could get additional cash.

MPM Capital, which has around $2 billion in assets, is already working with drugmakers on funding healthcare startups. This  includes a venture fund it closed last year at $400 million that included Novartis ($NVS) Astellas Pharma as investors.

Jürg Zeltner, president of UBS wealth management, said: “The record sum raised for the UBS Oncology Impact Fund is a milestone for our work in sustainable investing and for the impact investing industry as a whole. We believe initiatives like this can give hope to cancer sufferers and their families and divert more capital towards finding treatments and cures.”

Mark Haefele, chief investment officer at UBS wealth management, told the Financial Times that the Fund would “look, smell and act” like a regular fund, “and then change the world on top of that”. He said he expected investors to earn annual returns of more than 10%.

UBS did not disclose details of the fee structure but said it would be similar to other venture capital funds.

This will likely prove supplemental to Vice President Joe Biden’s “cancer moonshot”, launched back in January, and will work alongside other grants such as former Facebook president and billionaire Sean Parker’s new oncology institute--which launched earlier this month with an upfront $250 million grant.

This is on top of the many billions of dollars pharma and biotechs have and continue to invest into cancer research.  

-check out the release
-see the FT’s take

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