UBS Wealth Clients Invest $471 Million for Cancer-Drug Fundby
Percentage of manager profits will go to help poor countries
More than half of money came from clients in Asia-Pacific
UBS Group AG’s wealth-management unit raised $471 million from clients for an oncology fund that will divert some of its profits to cancer research and health care in emerging markets, the bank said Wednesday in a statement.
The fund’s manager, bio-venture firm MPM Capital, plans to donate 20 percent of its carried interest in the fund to support additional cancer research and access to health care in the developing world, said Bard Geesaman, a managing director at MPM. It also aims to direct 1 percent of revenue from any drugs sold out of the fund to such causes through royalty arrangements.
With the fund, UBS is expanding efforts to tap into the nascent world of impact investing, or backing potentially profitable companies that are trying to produce social and environmental good. More than half of the money for the Oncology Impact Fund came from investors in the Asia-Pacific region, as the Swiss bank didn’t market it to U.S. clients.
"First and foremost, this strategy is a good investment," Mark Haefele, global chief investment officer of UBS Wealth Management, said in an interview. Drugs to treat cancer tend to be approved by regulators more quickly, offering investors the potential to see a return sooner, he said.
As record-low interest rates squeeze profits at banks, the wealth-management business has faced increasing hurdles in the past year with clients reacting to stock-market losses and falling energy prices. UBS Wealth Management has been raising money for this fund since last year and it closed this week to new investments.
The fund is targeting at least a 15 percent annual return on average, money in the fund is committed for at least five years and UBS declined to disclose the fees charged.