None of the information provided is investment or tax advice. You should always read the associated risks before deciding whether to invest. These can be found on the product pages as well as in our risks overview. Please confirm you have read the information above.
Downing launches new actively managed liquid alternatives fund aiming to deliver 7% to 10%+ per annum and positive returns in most markets. The new MGTS Downing Active Defined Return Assets Fund (‘Active Defined Returns’, the ‘Fund’), is the first fund from its new Liquid Alternatives team.
The Fund is aimed at institutional investors, Discretionary Fund Managers, IFAs and advised sophisticated individual investors, and will primarily consist of UK Government bonds and large-cap equity index options, which provide significant scalability and strong liquidity. It aims to deliver 7% to 10%+ per annum and positive returns in all markets except for a sustained equity market fall (generally more than 35%), over a period of at least six years.
The Fund is the first to be launched by the new Liquid Alternatives Team established by Downing. Collectively, the team has over 125 years of experience and sector knowledge, and includes Tony Stenning, who held senior roles at BlackRock and most recently was CEO of Atlantic House Group; Russell Catley, founder and also a former CEO of Atlantic House Group; Huw Price, a former Executive Director at Santander Asset Management, and Paul Adams, former Head of Cash Equities and Derivatives Sales, Royal Bank of Canada.
The Fund offers investors a compelling building block for multi-asset portfolios, aiming to add consistent and predictable returns, typically secured with a portfolio of UK Government bonds. The unique proposition includes a hybrid approach of using systematic derivative strategies and active management, combining liquid investments with predictable returns, and an equity like risk profile.
Investment strategy: Maximising the probability of delivering predictable defined returns across the economic cycle.
Systematic Liquid Derivatives: Systematic, derivative strategies optimise the equity risk-return profile. The Fund uses rules-based derivative strategies linked to the most liquid, large-cap global equity indices (i.e. FTSE100, S&P500) with the aim of harvesting well-proven consistent returns across a wide corridor of market conditions.
Strong security: The Fund will hold a high-quality portfolio of assets as secure collateral – typically UK Government bonds.
Active benefits: At times, rules-based, passive derivative strategies can underperform when markets move strongly – this is when specialist active management can add incremental gains by monitoring and monetising positions and applying active risk management.
Key benefits
Increased consistency and predictability of returns: Positive returns in all markets except for a sustained equity market fall of more than 35% over at least six years.
Diversification of risk: The Fund’s risk components are diversified across large, liquid equity indices, observation levels and counterparties. Secured with high-quality assets – typically UK Government bonds.
Active management: Our experienced team will actively manage the Fund and its investments to optimise risk and reward for investors.
Russell Catley, Head of Retail, Liquid Alternatives at Downing, said: “Put simply, we focus your investment risk on the probability of receiving the returns you need, not those you don’t. We target the highest probability of delivering 7% to 10%+ per annum with active management adding material incremental gains. We believe that we are building the next evolution of the proven success of Defined Returns funds
The Downing team isseeing strong demand from clients looking for alternatives to large-cap equity funds which are becoming concentrated in technology stocks, or alternatives to UK equity income funds and illiquid alternatives.”
Tony Stenning, Head of Liquid Alternatives at Downing, said: “The launch of our Active Defined Return Assets Fund is a significant milestone in the ambitious build-out of our new Liquid Alternatives strategies. It is a solution-focused fund that should deliver stable high single or low double-digit returns across a wide spectrum of equity market conditions, except for a persistent multi-year bear market. The Fund is designed to enhance balanced portfolios by providing consistent, predictable returns and is suitable for accumulation or drawdown.
“We aim to deliver a unique combination of proven systematic derivative strategies and specialist active management, and we are doing so at a very compelling fee level, below our closest competitors and in line with active ETFs.”
How the Fund is expected to perform in different markets
In bullish markets: UK Government bonds secure the capital, and the equity index options deliver a predictable 7-10%+ return per annum – giving up some less likely upside.
In neutral markets and normal market corrections: UK Government bonds secure the capital, and the index options deliver a predictable 7-10%+ return per annum.
In a sustained sell-off: if markets fall more than the cover to capital loss and do not recover for six years. Then capital is eroded 1:1 in line with the worst performing index.
The average Cover to Capital Loss is targeted at 35%: the average cover to capital loss represents the average level the Global indices within the Fund could fall before capital is at risk.
Fund key risks
Performance: Capital is at risk. Investors may not get back the full amount invested.
Liquidity: Access to capital is always subject to liquidity.
Counterparty risk: Other parties could default on the contractual obligations.
Fund Structure
UK regulated OEIC fund structure, fully UCITS compliant
Daily dealing, at published NAV
Minimum investment: £100,000
SRRI: 6 out of 7
Depositary: Bank of New York
Authorised corporate Director (‘ACD’): Margetts Fund Management Ltd.
I share-class: SEDOL: BM8J604 / ISIN: GB00BM8J6044
F share-class: SEDOL: BM8J615 / ISIN: GB00BM8J6150
Risk warning: Opinions expressed represent the views of the fund manager at the time of publication, are subject to change, and should not be interpreted as investment advice. Please refer to the latest full Prospectus and KIID before investing; your attention is drawn to the risk, fees and taxation factors contained therein. Please note that past performance is not a reliable indicator of future results. Capital is at risk. Investments and the income derived from them can fall as well as rise and investors may not get back the full amount invested. Investments in this fund should be held for the long term.
Important notice: This document is intended for professional investors and has been approved as a financial promotion in line with Section 21 of the FSMA by Downing LLP (“Downing”). This document is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is a trading name of Downing LLP. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference No. 545025). Registered in England and Wales (No. OC341575). Registered Office: 10 Lower Thames Street, London EC3R 6AF.
We are delighted to share Arecor's announcement of its first day of dealings on AIM. Arecor is part of the Downing Healthcare EIS portfolio and Downing FOUR VCT.
Arecor Therapeutics plc, a globally focused biopharmaceutical company that is targeting improving patient care by bringing innovative medicines to market through the enhancement of existing therapeutic products, is pleased to announce the admission of its Ordinary Shares to trading on AIM, a market operated by London Stock Exchange plc ("Admission").
Admission follows a successful oversubscribed placing by Panmure Gordon (UK) Limited ("Panmure Gordon"), raising gross proceeds of £20.0 million at a price of 226 pence per share. On Admission the Company will have a market capitalisation of approximately £62.5 million.
Trading of shares will begin at 8.00 am today under the ticker symbol "AREC" and the ISIN number GB00BMWLM973.
Sarah Howell, Chief Executive Officer of Arecor, said: “Today represents an important milestone for Arecor and we are very pleased to be listing on AIM. This IPO will allow us to continue to grow the business through the development of our own proprietary diabetes and specialty hospital products whilst creating further value through our technology licensing partnerships. We were delighted by the support and interest we received during this transaction which is testament to the potential of our innovative proprietary formulation technology platform, Arestat™. I would like to take this opportunity to thank our new and existing shareholders for their support and we are looking forward to embarking on this next exciting chapter in the Company’s development.”
Placing Statistics
Placing Price
226 pence
Number of Placing Shares to be issued by the Company pursuant to the Placing
8,849,558
Number of EIS/VCT Placing Shares to be issued by the Company pursuant to the EIS/VCT Placing
3,716,814
Number of General Placing Shares to be issued by the Company pursuant to the General Placing
5,132,744
Number of Ordinary Shares in issue following Admission
27,683,532
Percentage of Enlarged Share Capital represented by Placing Shares
31.97%
Gross proceeds of the Placing receivable by the Group
£20 million
Estimated net proceeds of the Placing receivable by the Group
£18.26 million
Estimated market capitalisation, upon Admission, of the Group at the Placing Price
£62.5 million
Unless otherwise stated, the capitalised terms used in this announcement have the same meanings as in the Admission Document. Copies of the Admission Document are available on the Company’s website at www.arecor.com
For more information, please contact:
Arecor Therapeutics plc Dr Sarah Howell, Chief Executive Officer, Tel: +44 (0) 1223 426060 Email: info@arecor.com
Consilium Strategic Communications Chris Gardner, David Daley, Angela Gray Tel: +44 (0) 20 3709 5700 Email: arecor@consilium-comms.com
Panmure Gordon (UK) Limited (NOMAD and Broker)Tel: +44 (0) 20 7886 2500 Freddy Crossley, Emma Earl (Corporate Finance) or Rupert Dearden (Corporate Broking)
Company Highlights
A revenue generating biopharmaceutical company that is targeting improving patient care by bringing innovative medicines to market through the enhancement of existing therapeutic products using its innovative proprietary formulation technology platform, Arestat™.
Existing and near-term revenue potential: Arecor’s strategy is to develop novel formulations of biopharmaceutical products with enhanced properties and to partner with major pharmaceutical and biotechnology companies under a revenue generating licence model with the potential to receive royalties and significant milestone payments. Arecor currently has a total of four active licensing agreements in place with partners that include Hikma and Inhibrx.
Broad portfolio with significant addressable markets: Arecor’s initial therapeutic focus is diabetes, with three insulin-based products in development. In addition, Arecor has a portfolio of different Ready-to-Use (“RTU”) and Ready-to-Administer (“RTA”) hospital specialty products in development.
Reduced development risk and timelines: By developing novel formulations of existing, approved therapeutic products, the Directors’ believe that the majority of Arecor’s specialty hospital products can be brought to market faster, and at lower risk and cost, than would be expected for standard new drug development. For Arecor’s diabetes programmes, the safety and efficacy of insulin is already proven and there is likely a lower burden regarding clinical studies that are required for approval.
Broad applicability across growing pharmaceutical markets: Arecor partners with global pharmaceutical and biotechnology companies to apply the Arestat™ technology to their proprietary products under a technology licensing model. These products can be at any stage in development from early phase clinical development through to products that are already on the market. The main areas of applications of the technology are novel biologicals, biosimilars, therapeutic vaccines and therapeutic peptides.
Extensive intellectual property protection: Arecor has developed extensive intellectual property protection both of its Arestat™ formulation technology and of the novel formulations of products it develops, comprising patented formulation platforms, know-how, product related IP and trade secrets, which maximise innovation, protection and commercial success.
Strong management team and Board: Arecor’s management team hassignificant experience in the specialty pharmaceutical industry and of managing high growth companies, capable of executing a major value proposition in the specialty pharmaceutical field.
Use of Proceeds
The net proceeds of the Placing will be used to:
Progress the Company’s lead diabetes products
Develop and expand its pipeline of specialty hospital RTU and RTA products
Build the team
Bolster working capital and strengthen balance sheet
Admission
The Directors believe that Admission will be an important step in the Group's development and will assist the Group in its development by raising its public profile, widening its shareholder base, providing potential future access to development capital to progress its current and future pipeline of proprietary products and enabling it to expand within its chosen therapy areas and expand its commercial partnerships. It will also provide the Group with the ability to incentivise its employees through share incentive plans, which should assist it in continuing to attract, retain and motivate high calibre employees.
Panmure Gordon, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with Admission. Panmure Gordon will not regard any other person as its client in relation to Admission and will not be responsible to anyone other than the Company for providing the regulatory protections afforded to its clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.
Neither Panmure Gordon, nor any of its directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
Important notice: This document is intended for retail investors and their advisers is for information purposes only. It does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Downing does not offer investment or tax advice or make recommendations regarding investments.
Downing LLP is authorised and regulated by the Financial Conduct Authority (FRN: 545025). Registered in England and Wales (No. OC341575). Registered Office: 6th Floor, St Magnus House, 3 Lower Thames Street, London EC3R 6HD.
.jpeg)