International Biotechnology Trust (IBT) has introduced a dividend policy alongside a broadened investment mandate.
Following a period of what the trust board termed ‘strong long-term performance’, a dividend equivalent to 4% of net asset value (NAV) will be paid in semi-annual distributions, pending shareholder approval.
In addition, the IBT, run out SV Life Sciences Managers, also plans to allow lead investment manager Carl Harald Janson (pictured) to invest in unquoted biotechnology funds.
The expansion of the allocation policy builds on Janson’s existing ability to directly target private biotech companies. It is designed to ‘diversify the company’s investment opportunities to gain a broader exposure to a range of investments offering capital appreciation and producing income’.
The new mandate will allow Janson to invest in SV Life Sciences Managers’ in house funds alongside third-party vehicles.
It will be constrained by the 10-15% allocation limit that currently applies to IBT’s direct unquoted investment allowance. As of 31 July the trust had 11% invested in the private sector.
‘There are some very exciting opportunities in the biotechnology sector and we believe the ability to invest in the unquoted part of the market through a fund will give us greater flexibility,’ said Janson. ‘We expect these proposals will be well received by our investors.’
The dividend payments will be made in January and August of each year – starting January 2017 – with the 4% figure based on the fund’s NAV on the final day of the financial year to 31 August.
‘The dividend payments should help to further align shareholder interests with portfolio performance,’ read a statement from the IBT board.
Both proposals will be voted on by IBT stakeholders at a 29 September meeting.
In the five years to 31 July IBT delivered a share price return of 246.7% alongside NAV growth of 245.98%, compared to the FTSE World’s 98.3% in the same period.
As of market-close on 8 September the trust was trading at a 12.2% discount to its £217 million NAV.