Polar Capital Global Healthcare Trust
Polar Capital Global Healthcare Trust invests in a healthcare stocks from around the globe. These companies will predominantly come from four sub-sectors: pharmaceuticals, biotechnology, medical technology and healthcare services.
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James Douglas, Co-Manager James Douglas is a fund manager on the Healthcare team at Polar Capital, having joined the firm in September 2015. He brings 20 years of industry experience, with a background in equity sales specializing in global healthcare at Morgan Stanley, RBS, and HSBC. James also has equity research experience from his time at UBS, where he was an analyst in the European pharmaceutical and biotechnology team. Before entering finance, he worked as a consultant for EvaluatePharma. He holds a PhD and a first-class honours degree in Medicinal Chemistry from Newcastle University, as well as an ACCA diploma in financial management.
Gareth Powell, Co-Manager Gareth joined Polar Capital in 2007 to establish the healthcare team, bringing over 22 years of investment experience in the healthcare sector, including 14 years as a Portfolio Manager. Before joining Polar Capital, he worked at Framlington, where he started his investment management career in 1999. He later joined the Healthcare Team in 2001 and co-launched the Framlington Biotech Fund, which he managed from 2004 until his departure. Gareth studied biochemistry at Oxford University, gaining experience at Yamanouchi (now Astellas) and various academic labs, including the Sir William Dunn School of Pathology. He is also a CFA charterholder.
James Douglas, Co-Manager James Douglas is a fund manager on the Healthcare team at Polar Capital, having joined the firm in September 2015. He brings 20 years of industry experience, with a background in equity sales specializing in global healthcare at Morgan Stanley, RBS, and HSBC. James also has equity research experience from his time at UBS, where he was an analyst in the European pharmaceutical and biotechnology team. Before entering finance, he worked as a consultant for EvaluatePharma. He holds a PhD and a first-class honours degree in Medicinal Chemistry from Newcastle University, as well as an ACCA diploma in financial management.
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Talking Factsheet
Quote from the Fund Manager
Investing in equities is a bit like golf in that every stock move, or indeed golf shot, brings someone somewhere pleasure.
James Douglas
Co-Manager
Investment process
The portfolio is split into two segments: growth and innovation with a circa 90/10 split. The growth element is made up of predominantly larger companies, whereas the innovation pot will invest into medium and smaller companies that have the potential for greater growth in the long run. These innovation companies are typically disrupters of conventional medical practices, mainly driven by structural transformation and employment of technology, to deliver the holy grail of better healthcare for less money.
The managers focus on firms with a business model that will enable them to achieve an innovator status in the industry, as well as large blue-chip companies which are proactive and driving change. Progress in information technology has improved diagnostic and monitoring, measuring value and effectiveness of treatment, which leads to a better understanding of diseases and, in turn, new products and new diagnostics. The managers actively seek out companies in these areas.
The types of stocks in which the managers tend to invest are likely to produce little or no yield. As a result, any income generated from this trust is very much a by-product of the process and is not part of the investment objective.
Risk
This is a specialist trust investing mainly in large blue-chip healthcare-related stocks, which tend to be less risky than their medium and smaller peers. However, the managers can and do invest part of the portfolio in other mid and small cap stocks, in particular biotech companies at the cutting edge of healthcare. By their nature, these stocks can be more volatile.
The overall risk of the portfolio is mitigated by ensuring a diversified portfolio of stocks by factors such as geography, industry sub-sector and investment size. This portfolio is likely to be subject to more volatility than the equity market as a whole. The trust can hold a maximum of 65 investments across both the growth and innovation pots.
ESG
ESG - Integrated
Being a specialist fund investing in a specific industry, ESG analysis is a lot more granular with this fund, but it remains an important part of the risk assessment and due diligence process. Considering the level of regulation in the industry, Gareth and James have a particular focus on governance, and how much importance management teams place on adhering to these rules. Meeting and engaging with these teams is an essential part of the investment journey and ESG considerations will be a part of this discussion. The industry also has a naturally large social impact, looking to find improvements in both treatments and care to help people live longer and better lives. The managers engage with firms with poor overall ratings to try and improve practices. Divestment is an option should this approach not be successful, though Gareth and James prefer to take a productive improvement approach.
Gearing
The trust does not gear up in the conventional sense and, with the exception of structural gearing through the issue of Zero Dividend Preference shares, will not utilise borrowings for investment purposes. The trust may borrow up to 15% of its Net Asset Value at the time of drawdown, when the Board believes that gearing will enhance returns to shareholders.
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