Sectoral AM launches new generics fund

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Montreal-based asset manager Sectoral Asset Management has launched the distribution of its new generics vehicle, Variopartner Sicav – Generics Funds.

This fund is available in dollars and euros. It targets private as well as institutional investors.

The Sicav will invest worldwide in a focused selection of listed generics and specialty pharmaceuticals companies of all sizes. It aims to achieve long-term capital growth by exceeding its benchmark index, the MSCI World Pharmaceuticals.

“The global generics market, with a growth rate of around 10% since 2012, is set to rise by more than $400bn (€372bn) by 2017,” the manager said.

“This growth has been driven primarily by rising demand for pharmaceuticals in the emerging markets and also healthcare reforms in industrialised countries, both of which have fuelled a demand for generics.”

Sectoral AM added : “In addition to those generics markets that are still unsaturated, such as Italy and Japan, the emerging markets will account for a large part of the increase in demand.”

The Canadian asset manager has been already managed a generics fund for a client based in Switzerland since 2004.

It has appeared that over the period 1 July 2004 to 27 February 2015, the strategy delivered annualised compound returns of 11.8% (gross) and 9.6% (net), while the MCSI World Pharmaceuticals Index posted 8.5%.

Jérôme Pfund, CFA, CEO and co-founder of Sectoral, commented: “In the current market environment, investors are looking for opportunities to generate attractive, risk-adjusted performance with investments in growth industries such as generics.

“The healthcare sector as a whole has a comparatively defensive character, stemming from its commitment to a greater good: health. Because of this, it is much less susceptible to global economic fluctuations than other market segments. This combination of above-average growth and relatively low volatility makes generics an interesting theme for investors.”

Founded in 2000, Sectoral Asset Management has offices in Montreal, Geneva, and Hong Kong. As at the end of 2014, it managed over $3.2bn (€2.97bn) of assets.

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