Rothschild Bioscience Managers Limited (RBM), the Australian operating arm of the Rothschild Bioscience Unit, in May signed a licence agreement with the Australian government to operate a new fund, the Australian Bioscience Trust (ABT), under the new Innovation Investment Fund (IIF) programme.
Under this programme, the Australian Federal Government will provide an initial A$130 million (ecu 70 million) of venture funding for smaller technology-based companies to support the commercialisation of innovative products and technologies. The money will be deployed through selected venture funds in a ratio of as much as 2:1 with private sector investors. RBM is the only non-Australian fund manager and the only biotechnology and healthcare specialist among the five groups granted licences so far under the IIF programme.
The Bioscience Unit has raised A$15 million from private sector investors for ABT. The IIF will provide an additional A$27.5 million, making a total of A$42.5 million (ecu 22.9 million) available for investment in Australian companies commercialising new technologies in the bioscience field. Jeremy Curnock Cook, managing director of the Rothschild Bioscience Unit, said ABT is likely to co-invest with other Rothschild-managed biotechnology funds, particularly Biotechnology Investments Limited (BIL), which has been active in the Australian market since the late 1980s and has stepped up its activities in the region over the past three years.
ABT was raised from both corporate and institutional investors. Jeremy Curnock Cook explained that RBM set out to bring in a corporate investor with a good feel for the technologies and opportunities being developed in Australia, to fill a similar role to that played by Zeneca in the International Biotechnology Trust. Commonwealth Serum Labs is the cornerstone corporate investor in ABT and the Australian university lecturers’ pension fund, TESS, is the largest institutional participant.
A team of three, headed by Rothschild Bioscience Unit Director Geoff Brooke, will manage ABT out of RBM’s Melbourne office, calling on what Jeremy Curnock Cook described as the “travelling expertise” of the rest of the unit.
Jeremy Curnock Cook said the establishment of ABT represented “another piece in the Rothschild Bioscience Unit’s international jigsaw puzzle”. The unit is pursuing a strategy of “picking off territories where the science base is of high quality, but investors are still at an early stage of the learning process when it comes to dealing with smaller high-technology companies”, he said.
Later this year, the Bioscience Unit hopes to expand its operations through a Canadian fund “similar in size and concept to ABT”, and is also contemplating establishing a dedicated vehicle for Continental Europe, although the group regards that as “a less pressing priority”, Jeremy Curnock Cook said.