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North American investors drawn to UK biotech

News Team, 14/07/2021

Biotech shares continue to out-perform the wider market on the London Stock Exchange in the first half of 2021, with international investors from North America drawn to the UK’s strong science and high-quality companies.

Since the start of the pandemic (March 2020) the Radnor Unweighted Broad Biotech Index has outperformed the FTSE All Share by 190 percent. Since the beginning of 2021, the sector has continued to outperform by 13 percent.

The findings are published in a report by Radnor Capital Partners, commissioned by the UK BioIndustry Association (BIA).

The report finds strong demand from North American investors for UK-quoted biotech (net inflow of £723m) and European investors (net inflow of £130m).

By contrast, UK larger institutions continued to be material net sellers in value terms with an outflow of £231m.

As public awareness of biotech and healthcare has been awakened by the pandemic, UK Retail Execution Only platforms have also proved to be a prominent force in the sector and were overall net buyers (+£40m) in the year to date.

The broader pool of capital represented by the sector as a result of increasing values and new capital being committed to the sector has meant that investor activity levels have in many cases increased through the course of 2021.

Dr Martin Turner, head of Policy and Public Affairs at the BIA, said: “These findings are further evidence that the UK is on the cusp of a golden age for biotech. Global investors, particularly from the US and Europe, can see the huge value in the sector and are flocking in. There is a great opportunity here to capitalize on the UK’s position as an international hub for finance, combined with our world-leading biotech sector, to put the UK at the heart of a global industry that will dominate the 21st Century.”

Iain Daly, director and co-founder at Radnor Capital Partners, added: “The capital raising element of our analysis is perhaps the most profound as 2020 saw a clear break from the previously established trend of declining fundraising activity. The evidence from 2021 to date is that fundraising volumes are tracking below 2020 but well ahead of 2019. With a number of potentially material IPOs to come in H2, this picture is likely to remain positive.”

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