International Biotechnology Trust PLC Partners with Schroders Capital for Unquoted Biotech Investments

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.