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Syncona’s funds boss exits as Bacit portfolio wound down

15 March 2019

Arabella Cecil, head of fund investments at Syncona, is leaving the top-performing life sciences investment trust after it decides to sell most of her portfolio hit by stock market falls last year.

Arabella Cecil, head of fund investments at Syncona (SYNC), is leaving the top-performing life sciences investment trust after the company decided to sell most of her portfolio which was hit hard by stock market falls at the end of last year.

Cecil was chief financial officer at the Battle Against Cancer Investment Trust (Bacit), an innovative fund that persuaded the fund managers in which it invested to waive their fees so the money could be donated to research into fighting the disease. At the end of 2016 it merged with Syncona Partners, the investment arm of the Wellcome Trust, to form the UK's largest listed life sciences fund with a current market value of £1.6 billion.

For the past two years Syncona has used the legacy Bacit portfolio of hedge and absolute return funds as a pool of capital to finance successful investments in 10 start-up life sciences companies. These include cancer specialists Autolus and Nightstar which it helped found and float on the Nasdaq, the US technology stock exchange, last year.

At the end of December, Cecil's funds portfolio stood at £282 million, alongside £130 million of cash, having generated £40 million of gains since the merger.

However, according to Syncona's broker Numis Securities, it fell 8.7% in the fourth quarter as global stock markets tumbled. Although this was less than the 10.2% slide in the FTSE All-Share, it was a disappointing performance for a portfolio that sought to minimise stock market volatility and was equivalent to a £3.9 million loss.

This week Syncona announced it would wind down the funds portfolio in the next three-to-six months and hold more cash and cash equivalents. Its aim was to focus on 'liquidity and capital preservation' it said.

Cecil will remain with Syncona while the portfolio is run down.

Syncona chief executive Martin Murphy said: 'I would like to thank our head of fund Investments, Arabella Cecil, for her great contribution to Syncona, successfully managing the fund investments as part of our strategic pool of capital to enable us to fund our vision to create global leaders in life science.'

Cecil's departure will leave two senior directors from Bacit at Syncona: Thomas Henderson, the brother of fund manager James Henderson who founded the investment trust in 2012 and who sits on its board as a non-executive director, and Jeremy Tigue, the former F&C (FCIT) fund manager who has been its chairman since launch.  

The plan to liquidate the old Bacit funds portfolio comes as Syncona's red-hot share prices shows signs of cooling down. Investor excitement at Syncona's apparent prowess in backing the right firms at the cutting edge of diagnostic developments has seen its shares nearly double in the past three years, rising nearly 33% last year alone to peak earlier this month at a 51% premium over net asset value (NAV).

However, since 4 March, when the company revealed it would receive a £135 million windfall from the £633 sale of Nighstar to Biogen, the shares have fallen 16% or 47.5p to 247p as the premium has halved to 26% over NAV.

A sale this week by Wellcome Trust of 57 million or 8.7% of Syncona shares may help set a new floor for the price. The shares were placed with institutional investors at 245p, a 5% discount to their share price on Wednesday's close. Wellcome had planned to sell 45 million shares but increased the amount it was disposing in response to investor demand, according to Numis. It made £141 million, retains a holding of 28.1% in Syncona and has undertaken not to sell any more for 180 days.

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