Re Management Arrangements

Finsbury Life Sciences Inv Tst PLC
21 May 2003


Wednesday, 21 May 2003



                  Finsbury Life Sciences Investment Trust PLC


      Changes to management arrangements and performance benchmark and the
                    introduction of a new continuation vote


Introduction


Finsbury Life Sciences Investment Trust PLC (the 'Company') announces that Dr
Andrew Clark, the principal investment manager of the Company's quoted
portfolio, has informed the Board that he will cease full time employment at
Reabourne Technology Investment Management Limited ('Reabourne'), one of the two
investment advisers to the Company's investment manager Close Finsbury Asset
Management Limited ('Close Finsbury'), with effect from the Company's next AGM,
due to be held in July.


The Board has taken this opportunity to review the overall management
arrangements and the Company also announces a reduction in the notice periods
applying to the Company's investment management and advisory agreements, an
amendment to the basis of calculating periodic fees for investment management
and investment advisory services, a new performance fee benchmark and the
introduction of a new continuation vote.


Investment adviser personnel


Dr. Clark has had prime responsibility for managing the Company's quoted
portfolio since its launch in 1997. Dr. Clark has informed the Board that,
following the Company's annual general meeting due to be held in July 2003, he
will cease full time employment at Reabourne and will become a consultant to
Reabourne on its fund management and investment advisory contracts, including
its contract in relation to the Company.


The Board have agreed with Close Finsbury and Reabourne that Reabourne's
principal investment advisory team going forward from the Company's July AGM
will consist of Mr. Michael Bourne (the co-founder of Reabourne together with
Dr. Clark) and Dr. Huaizheng Peng, a biotechnology investment specialist.


Mr Bourne co-founded Reabourne in 1995 (together with Dr Clark and Rea Brothers
Group PLC) as an investment advisory business specialising exclusively in the
technology and biotechnology sectors. Previously he was a director of Henderson
Investment Management with joint investment management responsibilities for HTR
Global Technology Unit Trust and TR Technology PLC. He is the lead manager on
Finsbury Technology Trust PLC and has been involved in making investments in the
biotechnology sector since 1985. Michael Bourne has been a fund manager of the
Company since launch.


Dr. Peng joined Reabourne in 1999 as an investment analyst specialising in
global biotechnology companies. He previously practised as a doctor of medicine
at Hunan Medical School and as a lecturer in molecular pathology at University
College Hospital, London. He has been involved in the management of the Company
since 1999.


Dr. Clark will continue to manage the Company's quoted portfolio together with
Mr. Bourne and Dr. Peng until the date of the AGM to assure a smooth transition
in the management arrangements and will continue to provide fund management and
investment advisory consultancy services to Reabourne on an exclusive basis
following such date.


Reduction in investment management and advisory notice periods, amendment to
periodic fees for investment management and advisory services and introduction
of new performance fee benchmark


The Board has agreed with Close Finsbury, Reabourne and Merlin that the
respective notice periods for termination of services under the investment
management and advisory agreements in respect of its portfolio should be reduced
from 24 months to 12 months to bring the arrangements in line with standard
practice across the investment trust industry.


The Board has also agreed with Close Finsbury, Reabourne and Merlin an amendment
to the basic management fee charged on the Company's gross assets (excluding any
investment in The Merlin Fund LP). The fee is currently calculated at 1.25 per
cent. per annum on such assets. The amendment provides that the fee shall be
1.25 per cent. per annum on such assets up to £50m, reducing to 1 per cent per
annum on such assets in excess of £50m. This reduction would be borne by Close
Finsbury, Reabourne and Merlin pro rata to their existing fee split
arrangements.


In addition the Board has agreed with Close Finsbury, Reabourne and Merlin a new
benchmark to be used in calculating any future performance fees that may be
payable. The Company's benchmark index since launch has been the FTSE All Share
Index (on a total return basis) and performance fees are payable in respect of
outperformance of the Company's net asset value (excluding any investment in the
Merlin Fund) over the growth in value of the FTSE All Share plus 8 percentage
points over each relevant 3 year performance fee period. Following a review of
potential replacement biotechnology based indices, the Board has resolved that
performance fees will be payable in respect of the outperformance of the
Company's net asset value (excluding any investment in the Merlin Fund) over the
growth in value of the Lehman's UK and European Biotechnology Index over the
relevant period.


No performance fee was payable in respect of the 3 year period ended 31 March
2003 and no performance fee will, in any case, be payable in the future unless
the value of the Company's net assets (less any investment in the Merlin Fund)
at the end of any performance fee period exceeds the 'high water mark' of c.£49m
set on 31 March 2000. This would require growth of approximately 150% in the
present value of the net assets (less the Merlin Fund investment) of c.£19.6m.


The changes to the notice periods, management fee and performance fee benchmark
described above shall be deemed to take effect from 1 April 2003, subject to
shareholder approval of the new arrangements by way of an ordinary resolution at
the Company's Annual General Meeting to be held in July 2003.


Continuation vote


The Board continues to believe that an investment trust structure is appropriate
for the Company. The investment trust structure offers flexibility whereby the
Company is able to borrow and the investment manager and investment advisers are
free to invest without the distraction of potential cash outflows.


However, in light of the changes in management arrangements, the Board believes
it is appropriate that shareholders be given the opportunity to vote on the
Company's continuation at the annual general meeting to be held in 2005, again
subject to shareholder approval of the new arrangements at this year's AGM. This
is in addition to the existing arrangements that provide for a continuation vote
in 2007 and at every fifth annual general meeting thereafter. It is therefore
the Board's intention to put forward an ordinary resolution to the effect that
the Company continue as an investment trust to shareholders at the 2005 AGM. The
Board will nevertheless keep the new management arrangements under review prior
to such date.


The Board is optimistic regarding the recent signs of an improving background
for investment in biotechnology companies and believes that the arrangements
outlined above will prove beneficial to shareholders in the future.





Enquiries

John Sclater
Chairman, Finsbury Life Sciences Investment Trust           020 7426 4000

Alastair Smith
Close Finsbury Asset Management                             020 7426 6240

Andrew Zychowski
Dresdner Kleinwort Wasserstein                              020 7475 6681






Dresdner Kleinwort Wasserstein Limited ('Dresdner Kleinwort Wasserstein'), which
is authorised and regulated by the Financial Services Authority is acting
exclusively for Finsbury Life Sciences Investment Trust PLC and no one else in
connection with the transaction. Dresdner Kleinwort Wasserstein will not be
responsible to any person other than Finsbury Life Sciences Investment Trust PLC
for providing the protections afforded to clients of Dresdner Kleinwort
Wasserstein or for providing advice in relation to the transaction or any other
matters described herein.







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