Yesterday I was sent an article in the Times for comment

https://t.co/wcuAbcWwRG “Pension funds are stuck in a rut of fixed-income investments that return poor value. They are missing the possibility of material returns available to those willing to invest more strategically, in innovative companies such as EyeBio”

— Henry Tapper (@henryhtapper) May 31, 2024

The author of that quote is Dame Kate Bingham , formerly Chair of the Vaccine Taskforce.

Reading her comments in the Times on “EyeBio”, I learned that

EyeBio is developing Restoret, a drug that has shown promising results in treating two of the most common causes of sight loss that together affect more than 200 million people.

It is now being sold to American pharmacist Merck for up to $3bn, making Kate Bingham’s SV Health Investors, where Bingham, 58, is a managing partner a huge profit. Bingham’s SV provided a multimillion-dollar seed investment and helped EyeBio to identify the exciting science and to build the business plan and budgets, as well as assembling the core team. Bingham brought together an international syndicate of investors and led the series A financing in 2022.

The $130m invested in EyeBio has already yielded a profit ten times that amount and that could rise to 30 times if the trials of Restoret fulfil their initial promise.

It is quite extraordinary that Bingham’s SV fund struggled to get funding . It is sad that this great success story needed overseas investors to get where it is and that it will now be German owned. But that is the way it is until money starts flowing freely into venture capital. SV is planning to launch another fund and people I know who are doing something about Mansion House are in the queue.

But oh what a struggle. I was reviewing a key features document yesterday for a private equity fund that will invest in Bingham’s SV and noted the disclosures the fund was being required to make. High charges, high volatility and projected returns of little more than 5% over inflation. I asked myself, who would – on this basis would invest in early stage capital – even if it were run by Bingham?

The answer is of course very few pension funds. When faced with the draconian risk disclosures , the uber-cautious projected returns on capital deployed and the multifarious risk warnings that surround such funds, pension schemes continue to run a mile -just as pension schemes did with EyeBio.

We need stories like EyeBio in the pension press and we need trustees to be gnashing their teeth that they missed out. But we won’t.  Which is why, Kate Bingham will probably be selling the majority of her next fund to overseas investors