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Fund Characteristics

Why invest in the healthcare sector?

  • The percentage of the developed world’s population over the age of 65 is rapidly increasing;
  • An aging population means more demand on healthcare for new and better drugs;
  • All over the world, new drugs and treatments are in development.

The bulk of the healthcare sector is made up of companies that are based outside the UK. Accessing this global market as a UK investor can be difficult and domestic choices are very limited. Within the UK, there are diminishing options for investment as the universe of companies is shrinking through mergers and acquisitions. Worldwide Healthcare Trust PLC (“WWH” or “the Company”) offers an opportunity to gain exposure to the healthcare sector on a truly global scale.

The investment portfolio of WWH has been managed by OrbiMed Capital LLC., (“OrbiMed”), since the launch of the Company in 1995, when it was called Finsbury Worldwide Pharmaceutical Trust. At that time £16m was raised through a share placing. A further £38m was raised through a share issue in 1996, followed by a placing open/offer in 2004, when a further £68m was raised. Now, the Company is the largest of the UK-registered investment companies to focus on the healthcare sector.

OrbiMed invests across the “life cycle” with its coverage extending from private equity through quoted biotech stocks to the big pharmas, as well as medical devices and healthcare services (eg health insurance). The team is headed by Sam Isaly who is supported by over 40 investment professionals, with extensive scientific, medical, and finance expertise. Usually over 60% of the portfolio is in large-cap companies over $5bn market cap, with approximately 20% invested in companies below that threshold. The portfolio is usually geared and there is scope for modest exposure to income producing securities, derivatives and swaps.

In early 2005, the Company introduced a discount control mechanism, with a commitment to protect a discount of 6% through the buyback of shares, which are then cancelled. This active policy has successfully kept the average discount to within acceptable limits.

In 2007, the Board of the Company appointed Frostrow Capital LLP as Manager, Administrator and Company Secretary, responsible also for marketing and promoting the Company. This is an increasingly popular model for investment companies, whereby the Board separates the investment management function from the remainder of the ancillary services required by an investment company. This ensures that the advice and services the Board receives are truly independent of the investment management function.

In July 2010 the Company’s AGM saw special resolutions approved which broaden WWH’s investment policy to include companies in the healthcare equipment, services and healthcare technology sectors. The name changed to Worldwide Healthcare Trust in order to better reflect the broadened investment mandate. The benchmark was also changed from the Datastream World Pharmaceutical and Biotechnology Index (total return, sterling adjusted) to the MSCI World Healthcare Index (total return, sterling adjusted) with effect from 30 September 2010.

In July 2011, the Company’s broker, Winterflood Securities, said this about the Company:

“We rate the OrbiMed team highly and they have achieved excellent long-term results for this fund. We view Worldwide Healthcare Trust as an attractive vehicle for investors looking for diversified exposure to the global healthcare industry.”