King & Wood Mallesons has advised UBS Wealth Management, the world’s largest global wealth manager, on the final closing of its $471 million UBS Oncology Impact Fund, an impact investing initiative aimed at developing cancer treatments.
Investments will be made in early stage oncology to accelerate the development of new cures. Cancer care is particularly appropriate for this kind of investment because of a supportive regulatory environment.
The market for cancer drugs is expected to grow faster than for any other disease, due to populations ageing in developed countries and an expanding middle class in emerging markets with better access to care. Oncology is the largest and fastest growing therapeutic area in terms of drug development activity, representing approximately a quarter of total research spend.
Impact investing aims to generate a defined positive social impact as well as a competitive return. It is an attractive area for investors who wish to align their portfolios with their values. It is potentially a highly significant source of capital for oncology, given cancer's wide-ranging social implications.
In addition to investing in early-stage cancer treatments, the Oncology Impact Fund will support academic research and better access to cancer care in the developing world.
A portion of any performance fees generated and half of a royalty attached with best efforts to all successful drugs sales will be managed by UBS Optimus Foundation and ultimately fund expanded access to cancer care for children and their families in the developing world. The other half of the royalty amount will be spent on academic grants to promising oncology-related research. The Fund has already struck the first royalty agreement of this type, bringing this innovative practice from theory to reality.
Jürg Zeltner, President of UBS Wealth Management, said, "The record sum raised for the UBS Oncology Impact Fund is a milestone for our work in sustainable investing and for the impact investing industry as a whole. We believe initiatives like this can give hope to cancer sufferers and their families and divert more capital towards finding treatments and cures."
Mark Haefele, Global Chief Investment Officer at UBS Wealth Management, said, "Impact investing gives our clients an opportunity to change the world and earn a financial return simultaneously. Using this growing medium to target cancer, one of the planet's biggest killers, helps fulfil a critical social goal."
Ajay Pathak, International Funds partner at King & Wood Mallesons said, “We are delighted to have advised UBS on this ground breaking and innovative fund which will make a substantial impact to the research and development of cancer treatments and improve access to cancer care around the world. The success of the fundraising shows the increasing appetite among investors in investment opportunities that can have a tangible social impact and deliver financial returns at the same time.”
Ansbert Gadicke, Co-Founder at bioventure investment manager MPM Capital, which is collaborating with UBS WM on the UBS Oncology Impact Fund, said, "We are delighted to be advising UBS on the management of this landmark fund. Over the long term, we hope this collaboration will add significant value in the field of oncology and in ongoing efforts to finance its development."
UBS Wealth Management is a leader in sustainable investment. The collaboration with MPM on the Oncology Impact Fund follows other programs including UBS Optimus Foundation’s Development Impact Bond focused on education in Rajasthan, India, support for investment vehicles that invest through funds into small and medium enterprises (SMEs) in developing countries and inclusive finance initiatives across Asia and Latin America. It also supports the aims of the UBS & Society program, which seeks to create long-term, sustainable and measurable benefits for clients and communities.
The full King & Wood Mallesons team was led by International Funds partner Ajay Pathak and associate Josie Liao with support from funds associate Guillemette Chamayou; Tax partner Stephen Pevsner and associate Charlotte Haywood; Regulatory Counsel Karen Butler and partner George Pinkham (New York Office).