Sygnia Oxford Sciences Innovation Fund Investing in the future of humankind
Sygnia OSI Fund focuses on impact investing Our mission We deploy 100% of our capital to generate socially impactful and sustainable long-term returns, where exceptional performance goes hand-in-hand with changing lives, making the unaffordable and the unachievable possible.
Morgan Stanley’s Investing with Impact Framework Minimise negative impact Target impact Restriction screening Environmental, Social and Thematic exposure Impact investing Governance (ESG) integration Definition Managing exposures by Proactively considering ESG criteria Focusing on themes and sectors Allocating assets to funds avoiding investments in alongside financial analysis to dedicated to solving focused on private enterprises objectionable activities, sectors identify opportunities and risks sustainability-related domestic structured to deliver specific or geographies and global challenges positive social and/or environmental impact Impact • Restriction criteria and • ESG integration process and • Macro analysis, sustainability • Impact approach, regional Investment degree of shareholder degree of shareholder advocacy research and sector focus focus, liquidity and impact Characteristics activism • May include some screening reporting and emphasis on • Not proactively seeking issues where public markets environmental and social solutions may not exist impact Investment Unit trust/ETF that excludes Segregated mandate which ETFs tracking an index of water A PE or VC fund focused on the Examples companies from buy universe requires incorporating analysis of utilities, existing renewable interaction of technology and (e.g. tobacco, firearms, coal ESG performance into stock energy projects, or infrastructure healthcare provision, biosciences mining companies) selection process investment. and renewable energy projects Public markets Public markets Public markets Private markets (traditional asset classes) (traditional asset classes) (traditional asset classes) (pe or vc funds) *Source: Morgan Stanley Global Investment Manager Analysis, February 2019
Why impact investing? Global Sustainable Development Goals – United Nations, 2015 • Rising global inequality has increased the need for affordable access to healthcare, education, inclusive finance and housing . • Climate change has been identified as the major threat facing humanity driving the need for renewable and alternative energy sources, energy efficiency and sustainable agriculture and forestry. • Technological advancements are making the unachievable, achievable, providing solutions at an exponential pace and low cost. Investor Demand • Millennials and high net worth individual investors are seeking to create a positive legacy by investing their assets in a way which marries social and financial objectives. • Regulators are looking to institutional investors and retirement funds to deploy capital in a socially and environmentally impactful manner. Responsibility and Opportunity • Asset managers , as custodians of capital, have a responsibility to broaden their investment objectives beyond financial goals. This includes all asset classes. • Investment opportunities are plentiful and likely to deliver exceptional returns over the longer term. • Direct impact investments are not accessible via traditional asset classes.
Investment Proposition
Sygnia OSI Fund Sygnia OSI Fund provides access to the shares of Oxford Sciences Innovation Plc, a platform which owns 25% of founders’ shares in all spin-out companies originating from OU with a current portfolio of 75 spin-outs and a pipeline of 10 spin-outs per year (effective ownership of 25% of rights to all past and future patents originating from OU) and more concentrated exposure to a curated set of spin-out companies. Launched: May 2019 (OSI was launched in June 2015 with £600m in capital) Fund size: R2 billion invested (R2.1 billion in commitments) Administrators: Langham Hall (Guernsey) External auditors: Mazars (UK) Fund auditors: Grant Thornton (Guernsey) Management fees: 1.8% pa plus 20% performance fee subject to a 6% per annum hurdle
Investment options – onshore and offshore SOUTH AFRICA Sygnia OSI Fund: Sygnia Life Endowment Policies investing in Braavos Capital I LP and Braavos Capital II LP, Guernsey-based closed-ended collective investment schemes co-managed by Braavos Investment Advisers, UK and Sygnia Asset Management, UK GUERNSEY Braavos Capital LP: • Feeder fund investing in Braavos Capital I LP and Braavos Capital II LP with Braavos investment team allocating assets between the two funds as and when investment opportunities arise • Minimum investment size: R2 million • Tax transparent vehicle Sygnia provides liquidity to investors in both options.
Why focus on the University of Oxford?
Why the University of Oxford? Times Higher Education ranks Oxford as one of the world's "six superbrands" on its World Reputation Rankings, alongside Berkeley, Cambridge, Harvard, MIT and Stanford. • Number 1 research university in the world, with 29 science faculties and 12 700 researchers and academics* • Medical Science Division rated number 1 in the world for Clinical, Pre-Clinical and Health subjects for the past 8 years* • £700m per annum R&D income ** • Luminaries: • 28 prime ministers • 33 Nobel laureates • Most innovations originate at world’s leading universities but… …UK universities lag far behind US peers in turning those into commercial opportunities (US market is overcrowded) • OU entered into a unique JV with leading asset managers in 2015 to turn IP into commercial spin-outs through Oxford Sciences Innovation Plc *Times Higher Education World University Rankings 2019 and Forbes’s World University Rankings **Oxford University Annual Financial Statements 2017/18
Oxford Sciences Innovation Plc Platform company enabling commercialisation of research ideas originating from the University of Oxford – effectively OSI owns 25% of all past and present IP of the university Launched: June 2015 (£600m in permanent capital raised from external investors) Commercials: Oxford University and OSI share equally in all qualifying spin-outs from Oxford University – deal term up to 45 years Practical application: • OSI’s Investment Principals work with academics to turn a patent into a spin-out company, build up the management team and develop the product through to revenue generation. • OSI receives founding shares in spin-out companies from the OU (founding shares are split 25% OSI, 25% OU, 50% relevant academic staff). • OSI supports spin-outs from start-up through to maturity – can opt to retain a significant equity stake (seed £100k to £10m, 20% to 40% stake when leading).
Oxford University spin-out history More spin-outs since the formation of OSI than in the previous 700 years since its founding
Attracted top brands in VC investing “OSI shareholders are amongst the largest most successful global companies and individuals.” Peter Davies, Senior Partner, Lansdowne Partners Ordinary Investors in OSI spin-outs Investors in OSI shares Holding % Sygnia OSI Fund and Google Ventures 95 200 000 15.66% co-investments Goldman Sachs Lansdowne Partners Sequoia Capital China 92 720 750 15.25% (UK) LLP Redmile (US VC firm) University of Oxford 39 739 973 6.54% Vertex Pharmaceuticals Goldman Sachs 24 250 000 4.00% F-Prime Capital Partners OUEM 24 166 667 3.98% Foresite Capital The Wellcome Trust 24 166 667 3.98% Sequoia Heritage 24 166 667 3.98% Syncona Temasek 20 833 333 3.43% GT Healthcare Capital Partners IP Group Plc 14 250 000 2.34% Samsara BioCapital Investors < 3% (59 General Catalyst 248 422 083 40.86% investors) Total 607 916 140
Board of Directors of OSI Name Title Company Senior Advisor, Lone Star Real Christopher Chambers Chairman Estate Fund Jim Wilkinson Chief Executive Officer Oxford Sciences Innovation Peter Davies Non-Executive Director Chairman, Lansdowne Partners Non-Executive Director and Member Regius Professor of Medicine, Sir John Bell GBE FRS of University of Oxford the Remuneration Committee Non-Executive Director and Member Alan John Aubrey CEO, IP Group Plc of the Audit Committee General Partner, Braavos Andre Crawford-Brunt Non-Executive Director Investment Advisers Non-Executive Director and Chairman Giles Kerr CFO, Oxford University of the Audit Committee Bernard Taylor CBE DL Non-Executive Director Chairman, Evercore Europe Aneeqa Khan Non-Executive Director Founder and CEO of Eporta
Investment team
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