Questor: this trust just sold a holding for £600m – and its entire market value is only £1.4bn

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Simply because we think the market fails to see its potential or perhaps does not have the patience to wait for that potential to become apparent in actual profits. As we said on Wednesday, generating returns from the scientific breakthroughs at which the healthcare sector excels takes time, while many investors have made fortunes over the past couple of years from spotting the immediate bounty on offer from Covid winners such as Microsoft.

Syncona’s portfolio currently consists of 12 companies and it aims to increase that number to between 15 and 20. Several can offer concrete evidence of progress: collectively 12 of their treatments are undergoing clinical trials and three have already floated on the stock market. 

Of four companies no longer in the portfolio, two, Blue Earth and Nightstar, were sold for impressive gains of 9.9 and 4.5 times the amount invested respectively, while the other two proved unviable and were wound up. A 50pc success rate is good when you are seeking to build businesses from nothing in a sector that teems with scientific, regulatory and commercial risks.

But it is the fund’s most recent deal that cements our belief that its managers are equal to the challenge and can be expected to produce a regular stream of lucrative winners.

Just before Christmas Syncona announced that it had agreed to sell its 48.5pc stake in one of its holdings, Gyroscope Therapeutics, which makes gene therapies for blindness, for up to £589m. The fund had co-founded Gyroscope in 2016 and funded it since but the really striking thing is how that £589m figure, admittedly the maximum proceeds, compares with the value that the market currently ascribes to the entire trust: just £1.4bn.

Investors seem to be expressing scepticism that any other holdings, current or future, will generate returns along the lines of those achieved by Gyroscope. In view of that 50pc success rate on investments already exited, such a view seems very pessimistic to this column.

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