BACIT cancer fighting trust announces dramatic change of course


#1

Originally published at: http://whichinvestmenttrust.com/bacit-cancer-fighting-trust-announces-dramatic-change-of-course/

The trust was set up with duel goals of delivering low risk returns, whilst also raising funds for charity, but is now intent on morphing in to a life sciences fund, working alongside The Welcome Trust, and Cancer Research UK, in an ambitious transformation. Fast Facts BACIT is a regular investment trust that donates 1%…


#2

What a strange move. I don’t own shares in Bacit but it has been on my radar for some time. I can’t really think of a reason for buying in to this right now though. If the new investment remit works it will be 5-10 from now before we will know.
I’m all for giving money to charity but I wouldn’t commit £20-£30k of my pension to a risky charitable endeavour that may or may not work out.

The founders are probably very wealth individuals who can afford to loose some money, I can’t say I’m in the same position.

Wouldn’t it have been a better idea to launch a new fund to buy the Welcome assets rather than kill Bacit to fund it?


#3

Yeah I think I agree with you there @Londoner. The changes are so drastic, you have to wonder, have they just got bored with it and what would happen if they got bored again .

I have a Bacit holding but it only small, it was one I was looking to increase as I got to know it better.

One problem with the new strategy they’re suggesting is I have no idea if it will even work or not, and in the meantime are they going to look after shareholders interests, or be only concerned with the worthy science element.

I’m definitely exiting this one.


#4

I had never heard of Bacit until I read this article but I must say I don’t share your negative opinion of this deal. I think it looks exciting and interesting, and potentially highly profitable.

Getting first dibs on the medical discoveries that Wellcome and Cancer Research UK are responsible for is an enticing prospect.

Where I do hesitate and have concerns though, is in the managements commitment to shareholders. Are they really going to deliver us a profit or get completely sidelined by the charitable aspect.

If they could reassure a bit on that I might be interested in investing in this.

The timescale is not an issue for me, I invest in private equity, which has produced fantastic long term returns. If I could feel a little bit more confident in the profit commitment I may well invest here too.


#5

I’ve got a reasonably large chunk of my IT portfolio invested into BACIT, as I always liked the remit, the fact that it allowed access to some hedge funds that otherwise as an individual investor I couldn’t, and that it had a Witan type multi-manager structure but the investment managers were working for free and the charges were therefore going to good causes (which from memory of reading the fact sheets were not just cancer charities, although they obviously got the bilk of the donated monies). It was/is a pretty unique model, and a very good one I always thought (the lack of volatility was also an attraction I admit), and it has often been one of my monthly drip investments via my funds platform.

I really don’t like the proposals one little bit. If I wanted to invest directly into private equity life science funds I would do so already, but I don’t. I’m assuming from the article that I’ll be better waiting for the share buy back offer than selling out now, but I won’t be sticking around for these changes. It’s sad, and I hope its moderate success (just under half a billion size from a very new fund is good going) will mean that we get something similar from other find managers in the future.


#6

I don’t know if any of you have seen this Weekend’s FT but David Stevenson is a big fan of the changes at BACIT:
https://www.ft.com/content/d486164e-a832-11e6-8898-79a99e2a4de6

Maybe have a look @captain_duff @elitist @andytheinvestor @londoner


#7

Yes I did read that @andreacz but that FT column is called the Adventurous Investor. It’s for the weird and whacky type of investments for the most part, that just ‘might’ be worth a look.

BACIT as it is at present is a fairly safe, certainly conservative multi manager, as @captain_duff described.

It’s new adventurous form might be good for David Stevenson, but it’s a bit of a betrayal of existing investors. Thank goodness there is the option to exit at NAV.

@elitist I wouldn’t be too confident that they won’t completely change the investment policy willy nilly in the future as they have done now.


#8

@andytheinvestor, I think you are right on the money. Shareholders are last on the list. I also couldn’t use this for my clients as it would be an imposition to force their hand to pay to a charity, that is assuming I liked the investment style, which I didn’t!


#9

Well if this forum is anything to go by shareholders hate this move. They are hoping to raise a heck of a lot of money but I wonder how that’s going to go for them. I bet a lot of people are going to head to the exit.

I only bought this a few months ago, just a small amount using a dividend I received, so slightly more than two grand. It’s so small I probably will roll over to the new version of the trust but I won’t be investing any more, whereas, I would have put a lot more in to it if it was remaining as a fairly safe multi manager trust.


#10

I think there is a strong argument in favour of a new trust like this, as there are only a few existing trusts specialising in medical research, life sciences and biotechnology and these tend to be focused on the US; BB Biotech is an exception but from memory is only just in the process of acquiring a London listing.

The proposed new trust will complement nicely the new Francis Crick Institute near King’s Cross station in London, opened earlier this year and developed in partnership between Cancer Research UK, the Wellcome Trust (again) and several London universities. It will be the biggest bio-medical research lab in Europe. Presumably it is is envisaged that discoveries at the Francis Crick will flow through into viable new businesses, based perhaps at a university science park like the large new one at the University of Reading, which has just broken ground and can be seen by anyone driving west along the M4 towards Junction 11. This is all on top of the UK’s existing strong medical research and pharmaceutical bases.


#11

I agree that there is a need for a trust like this, and it sounds to me like the type of thing I would invest in, maybe in my SIPP @matchmade, the only way in which I agree with others in this forum is they seem to have a bit of a credibility issue because of the way in which they have made this switch. I can see how existing shareholders would be a bit peeved.

I think on reflection I would need more reassurance form BACIT about how they are proposing to treat shareholders, and that is missing from both the article here and from what i have found anywhere else on the internet. I specifically looked because it is something I could invest in.

I wonder if the BACIT managers or Board are following this discussion because they should probably get involved and answer some of the points I think.