Edison issues update on RTW Venture Fund (RTW)
London, UK, 4 August 2023
Edison issues update on RTW Venture Fund (RTW)
RTW Venture Fund is focused on innovative biotech and medtech businesses that have clear pathways to delivering approved medicines and medical technologies to patients. It is managed by RTW Investments (RTW), a New York-headquartered, life sciences investment firm with offices in London and Shanghai. RTW takes a science-led, full-lifecycle approach to investing in both public and private opportunities, supporting companies at all stages of development via multiple capital solutions. Biotech stocks, in particular those of smaller-cap companies, fell out of favour in early 2021, but started to recover from mid-2022. RTW's managers are hopeful that the sector's positive fundamentals are starting to be appreciated again and that positive developments at portfolio companies will generate significant value for RTWVF's shareholders. The fund's largest holding recently received a takeover bid at a c 75% premium to its pre-bid share price.
Rising interest rates and heightened investor aversion led to a major drawdown in biotech stocks between February 2021 and June 2022. However, long-term positive biotech industry fundamentals remain intact, including aging global populations and high levels of industry innovation, with faster introduction of new drug modalities. In addition, biotech company valuations, especially those of smaller businesses, are looking very attractive. RTWVF offers investors an interesting way to gain exposure to the global biotech (c 87% of the fund) and medtech (c 13%) sectors. At end-March 2023, c 75% of the fund was invested in core holdings, both private and public companies. The remainder is invested in the 'other public portfolio', which mirrors positions in RTW's private funds, instead of holding cash, for future deployment into the core portfolio. RTWVF aims to generate NAV total returns above 20% pa over the medium term.
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