By Max Klietmann, VP of Research, Life Science Nation
In the wake of the turbulence caused by the financial collapse and global recession, family offices have become discouraged by the performance of their allocations in alternative asset classes such as hedge funds and private equity. As fund managers struggle to justify handsome management fees for poor performance, many sophisticated family offices are beginning to take their alternative allocations in-house. Though many in the space predicted this to be a natural trend given the circumstance, circumstances aside, this is a trend which is better aligned with the ultimate mission of the family office when strategically deployed in life sciences. The convergence of several defining characteristics of family office investors and the recent developments in life sciences are creating a perfect storm that will surely change the industry in a major way.
To begin, lets consider the primary mission of a family office: to maintain a family legacy through capital preservation and philanthropic engagement. This dual mandate is the major differentiator for family offices versus any other investor group. It is for this reason that the life sciences are so appealing.
Life sciences constitute one of the single best performing sectors available to investors. The industry is growing at an unprecedented pace, and it is one of the only sectors that were able to maintain strong positive growth throughout the recession. According to one large multi-family office in Boston, a significant portion of client assets that were allocated to alternatives are now being deployed directly. However, due to the sophistication of the family office investor, this capital behaves much differently than angel capital and is truly globally oriented.
Another reason that life sciences are so appealing is that from a philanthropic perspective, investment in life sciences provides an opportunity to allocate capital in a much more productive manner than via foundations or charities. Without question, those organizations are extremely valuable, but they simply cannot compete with the potential social impact of a breakthrough scientific discovery. This is especially true when one considers that many family office’s philanthropic mandates are influenced directly by health conditions prevalent in the family. It becomes a compelling argument to invest directly in emerging technologies targeted at treating or eradicating those diseases.
Finally, there is the overall theme of investing with a legacy in mind. Life sciences are a field committed to finding the solutions to many of society’s gravest ailments. It is natural for family offices to desire to be a part of something on the scale of life sciences in that it provides potential for them to create a lasting impression on the world in their name.
About Life Science Nation
Life Science Nation (LSN) is a sourcing platform for market intelligence and prospect pipeline development in the life science arena. LSN enables life science professionals to generate a list of qualified global targets that are a fit for their company’s products, services, and fundraising efforts.
As a leading B2B source for decision-maker contacts in the life science industry, the LSN platform has more than 24,000 life-science organizations worldwide, including biotechnology, pharmaceutical, medical technology, service providers, suppliers, nonprofits, and life science investors. The LSN platform utilizes the most extensive research and data mining techniques to provide deep insight into target markets, top-tier accounts, and global business opportunities and help clients earn a measurable ROI on their marketing investment.
Contact
To learn more about Life Science Nation please contact,
Life Science Nation
9B Hamilton Place
Boston, MA 02108
Phone: +1 (617) 600-0668
Email: info@lifesciencenation.com
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