1st February 2013

Welsh firms on radar of £100m Welsh Life Sciences Fund

Original article by Sion Barry, WalesOnline

Biotech serial entrepreneur Sir Chris Evans is hopeful the first investments from the £100m Welsh Life Sciences Fund can be confirmed in the coming weeks, with three indigenous firms identified as targets.

Port Talbot-born Sir Chris chairs Arthurian Life Sciences, which via a tender overseen by the Welsh Government’s banking subsidiary Finance Wales, has won the contract to manage the £100m Welsh Life Sciences Fund – of which the Welsh Government has committed £50m, with Sir Chris confident that Arthurian will be able to secure at least another £50m from other investors.

Sir Chris, who said that the formalities of signing the fund contract would be completed this week, has confirmed a strong board for Arthurian – which will run and manage the fund on a discretionary basis with equity investments ranging from £500,000 to £5m.

The board includes former director general of the CBI, Sir John Banham, former cabinet minister Lord Hutton, Professor Trevor Jones, director general of the Association of the British Pharmaceutical Industry (ABPI) and former board director of the Wellcome Foundation, and Jeremy Curnock Cook, a leading figure in biosciences investment, who will chair the investment committee.

Speaking yesterday Sir Chris said Arthurian already has investment targets on its radar.

He said: “It’s a ten year fund and we will not be doing everything in the first year, but we have already done a lot of the ground work around various companies in Wales.

“There are three companies in Wales that we consider worthy of investment which we could do over the next few months if we can agree terms and get through our investment committee.”

He confirmed a number of English-based and small start-up medical businesses in the US could be also be among the first batch of investment deals announced.

A condition of investment for companies outside Wales, is that they relocate here. Sir Chris said businesses could also benefit from Welsh Government business support and investment.

“They will live in Wales, have the businesses and headquarters here… while creating wealth, jobs and development of IP [Intellectual Property] in Wales,” said Sir Chris.

On firms backed, whether already based in Wales or relocating, he said: “We want to take them and step up the impact of their products and technologies to really help them grow as big companies outside of Wales… keeping them in Wales, but with 90% exported to the world.”

The Arthurian board also includes former vice chancellor of the University of Wales, Professor Marc Clement, who has interests in a company of companies at the Institute of Life Science at Swansea University.

Sir Chris, who also chairs investment fund Excalibur, said Business Minister Edwina Hart is aware of and fully supportive of all Arthurian’s board members. Sir Chris said: “We [the board] are aware that Marc has some detractors, but when you do things and are successful that can happen.

“I have known Marc for a long and am I aware of what he has done. He is a very well networked and entrepreneurial individual and he gets around the planet.

“I know he will really help to galvanise and bring energy to the fund and will rise above any criticism and let the success of the fund do the talking.”

Longer term Sir Chris said Arthurian would look to double the size of the fund to £200m.

With such a high calibre board he said that potential conflicts of interest could arise.

“I have not known many funder managers who don’t have conflicts. We have a fantastic board with many active investors in life sciences including myself. So we are clearly going to have be careful on deals for any connections with us.”

He said if it was a private fund [no public sector support], there would be an insistence that he brought the best companies in his portfolio of around 60 firms to the investment table.

“I will not be bringing any of my gems to Wales at this stage,” said Sir Chris.

He said he was confident that the fund would exceed its return on its investment target.

He said: “You could make a huge amount of cash by selling a company in 18 months. But then you might have a company which continues to manufacture in Wales and goes from employing 10 to 600 people – which in terms of the economy of Wales is a much better return – but only makes a 20% return on investment and some people might say that is not stellar.”

In the short term the project will be run out of Sir Chris’ private investment fund Excalibur, but he said the board was looking at potential candidates for a chief executive.

He added: “We have identified strong candidates outside of Wales, but will be advertising to the Welsh network too.

“By the end of the year we will have a full-time Arthurian management team on the ground in Cardiff, based in the life sciences hub.

“This is the first step on the rung of the ladder, with the next being the establishment of the life sciences hub followed by the launching of the Welsh life sciences brand… the future is extremely exciting for Wales.”