International Biotechnology Trust taps Schroders Capital for private biotech funds
International Biotechnology Trust PLC (IBT) has signed a partnership agreement with Schroders Capital to expand its exposure to unquoted – that is, privately held – biotechnology companies. The move fits squarely within IBT’s stated policy to put a limited slice of the portfolio (5–15%) into private markets alongside its core listed holdings.
IBT currently sits at c.8.4% unquoted exposure (as at 26 September 2025), mainly through two funds managed by SV Health Partners. Those existing funds have delivered strong performance, are unchanged by today’s news, and will sit outside the new partnership structure.
What IBT is doing and why it matters
IBT will commit an initial £10 million – about 4% of current portfolio value – to a new partnership vehicle managed by Schroders Capital. Over time, the intention is to deploy this into funds backing unquoted biotech companies, with diversification by manager, vintage (the year a fund starts investing), and geography.
In practice, this is about broadening IBT’s private-market toolkit beyond its longstanding SV Health exposure. The Board wants shareholders to access earlier-stage innovation through a spread of specialist managers, not a single house. That matters because biotech cycles can be feast or famine; having multiple managers and vintages helps smooth that ride.
Who is managing this and what’s the pitch?
Schroders Capital brings more than 25 years in healthcare and biotech, with over $4.3 billion (approximately £3.5 billion) committed across nearly 700 investments worldwide. The pitch is manager selection and access: partner with teams that have strong scientific depth, disciplined processes, and differentiated deal flow across North America, Europe, and Asia.
Schroders Capital Management (Switzerland) will be the investment manager to the partnership, and IBT will be the sole limited partner – a standard private fund structure where IBT provides the capital and Schroders Capital makes and oversees the commitments.
Fees, caps, and what to watch
Under the partnership agreement, Schroders Capital will charge 0.9% per annum on the asset value of IBT’s investment in the partnership, plus £25,000 per annum for administration. Importantly, the aggregate fees due to Schroders Capital in any year are capped at 0.25% of IBT’s net asset value (NAV). That cap is a clear nod to shareholder alignment.
Two nuances to keep in mind:
- The 0.25% NAV cap refers to fees paid to Schroders Capital for the partnership. It does not cover the fees charged by the underlying unquoted funds the partnership invests in – those underlying fees are not disclosed.
- Drawdown timing isn’t disclosed. In private markets, commitments are typically called over several years, so fees linked to invested amounts may ramp up as capital is deployed.
Portfolio impact: within policy and more diversified
With an initial £10 million commitment, IBT’s unquoted allocation could progress towards the low teens over time if fully deployed, still within its 5–15% policy range. The existing SV Health Partners funds – highlighted as strong performers – are unaffected and remain outside this partnership.
Net-net, IBT is building a broader bench in private biotech, which should reduce manager concentration risk and add geographic and vintage diversification. That’s helpful when public biotech markets are volatile or IPO windows are patchy.
The investment case: upside, risks, and balance
Potential positives
- Differentiated access: Schroders Capital’s network across nearly 700 prior investments could improve pipeline quality and manager selection.
- Diversification: Spreading exposure by manager, vintage, and region aims to flatten the inherent cyclicality in biotech.
- Fee discipline: The 0.25% of NAV cap on Schroders Capital’s fees is shareholder-friendly for a private markets sleeve.
- Strategic fit: Moves IBT towards the middle of its stated 5–15% unquoted range, without disrupting existing successful positions.
Key risks
- Liquidity: Unquoted holdings are harder to sell and rely on exits (M&A, IPOs) that can take years.
- J-curve effect: Private fund returns often dip early as fees and early investments settle before potential gains; timing matters.
- Layered fees: Underlying fund fees and any performance carry are not disclosed, and will sit on top of the partnership fees.
- Deployment pace: No timetable for drawdowns or target deployment speed is given; pacing will influence near-term impact and costs.
What’s not disclosed
- Underlying fund list, target strategies, or geographies beyond the high-level remit.
- Deployment schedule, fund life, or exit expectations.
- Underlying fund fee terms, performance targets, or carry structures.
Lack of these details is common at announcement stage, but they are the levers that ultimately drive net returns from private investments.
My take: a sensible broadening of IBT’s private biotech sleeve
This looks like a pragmatic step for IBT: keep the proven SV Health positions intact, and bolt on a diversified private-market conduit via Schroders Capital. The fee cap at 0.25% of NAV is a genuine positive and should limit cost creep at the portfolio level.
The real test will be execution – which managers are selected, how quickly capital is deployed, and how the portfolio weathers the private biotech cycle. With the unquoted allocation still well within policy bounds and an initial commitment of c.4% of the portfolio, this is evolution rather than revolution. For shareholders, it adds another route to earlier-stage innovation while keeping a rein on fees.
Key numbers at a glance
| Current unquoted exposure | c.8.4% of portfolio value (as at 26 September 2025) |
| Policy range for unquoted | 5–15% of portfolio value |
| Initial partnership commitment | £10 million (c.4% of current portfolio value) |
| Partnership management fee | 0.9% per annum on invested amount |
| Administration cost | £25,000 per annum |
| Fee cap to Schroders Capital | 0.25% of IBT’s NAV per annum |
| Schroders Capital track record | 25+ years, over $4.3 billion (~£3.5 billion) across nearly 700 investments |
Bottom line
A measured expansion of IBT’s private market toolkit with a clear fee cap and no disruption to current unquoted winners. It adds breadth and potential access to high-quality deal flow; the unknowns are deployment pace and underlying fund economics. Sensible, incremental, and worth watching as commitments begin to be drawn.
