Investing in Longevity – The Next Investment Trend After ESG
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The Covid-19 pandemic took the world by surprise in 2020. Markets went into turmoil as countries began to prepare for lockdown.
Many traditional asset classes including real asset and equity nose-dived at the onset of the pandemic. Major industries such as tourism, entertainment, airline, and hospitality were severely affected. Both small and large investors who had started businesses in these sectors took a hard hit on their investments.
This global pandemic caused a vast majority of people including ultra-high net worth individuals (UHNWs) to reconsider their investment priorities and goals for the next decade.
A Shift Towards Doing Something About Aging
The previous focus of investors and society, in general, has been towards compensating for ill health and loss of independence brought about by aging. Therefore, in a way, they have more reactive than proactive. Over the years, there has been a shift in priority to developing new rejuvenation technologies that target the older population to prevent age-related diseases so that they can live a longer and healthier life.
Clearly, there has been an increased effort to tackling aging directly. Due to various technological advancements over the past decade, scientists are also feeling confident that something can be done to at least slow down the process of aging, if not completely stop it one day.
The World’s Longevity Economy
In the last decade or so, there has been an increased interest from the investment community and even governments in the longevity industry. A UK based company, Aging Analytics Agency, predicted that the sector will be worth approximately $27 trillion by 2026.
Ultra-high net worth investors in the silicon-valley have also started pouring their investments in the longevity market. Amazon’s CEO, Jeff Bezos, and the billionaire PayPal co-founder, Peter Thiel, recently invested in a South San Francisco-based Unity Biotechnology company. The mission of this company is to extend the healthy years of a human’s lifespan. In 2013, Google had also formed an aging research company called Calico. The co-founder of Oracle, Larry Ellison, has donated hundreds of millions of dollars to aging research.
Longevity – An Asymmetric Investment
Investing in longevity is unlike any of your traditional investments. By nature, it is an asymmetric investment.
An asymmetric investment is when the potential upside is much greater than the potential downside. These investments are also known to have a very high risk to reward ratio.
Novacyt is an example of one such biotech company based in Paris. As you can see from the table above, the company has generated about 2270% return for its investors within only 6 months. That is why longevity investments are the new holy grail for investors. The strategy behind this type of asymmetric investing is not to worry about the nine investments that will go bad. Because the tenth one could be a major success creating phenomenal returns for the investor.
Several longevity focused funds in the past decade have been launched to encourage investors to take a more balanced and diversified portfolio management approach towards longevity investments. This reduces the risk across a large variety of longevity startup companies, some of which will eventually turn out to be ultimate game-changers.
Top 5 European Longevity Focused Investment Funds
- Rejuveron, Switzerland: This is a fully integrated biotechnology platform company that invests in drugs and technologies which could have the potential to significantly prolong human lifespan. They aim to find cures for age-related diseases such as Alzheimer’s, arthritis, etc. Matthias Steger is currently the CEO of the company and is leading this mission.
- Kizoo Technology Capital, Germany: This is a venture capital firm that provides mentoring, seed, and early-stage financing with a focus on rejuvenation biotech. LIFT Biosciences is one of its portfolio companies that is currently developing the first curative and affordable cell therapy for all solid tumors.
- Apollo Health Ventures, Germany: This venture capital firm currently has 3 companies in its portfolio – Aeovian Pharmaceuticals, Cleara, and Samsara Therapeutics. They specialize in therapeutics and cellular research.
- Capital, Switzerland: This venture fund is focused on the longevity industry with a diversified investment strategy that focuses on Artificial intelligence on longevity, Agetech, and Longevity fintech. In addition to providing traditional venture investments, they also issue bankable financial products such as Tracker Certificates on the longevity industry. It aims to raise around €200 million by the end of 2021.
- Juvenescence, UK: They have raised €150 million since 2017 to develop a range of therapeutic assets to address aging and regeneration.
The Longevity Investors Conference 2020
The Longevity Investors Conference was held online on October 1st, 2020. It welcomed a mix of researchers, scientists, and investors to discuss the landscape of the aging research field.
Marc Bernegger, one of the co-hosts of the conference, discussed how the longevity industry will soon be one of the largest investment opportunities simply because every human on the planet is a potential customer of the industry.
The conference started off with Dr Aubrey de Grey and Dr David Sinclair providing the investors with a high-level summary of the current understanding of aging, NAD+ biology, and partial cellular reprogramming. After this initial overview, there were talks about investment in the longevity industry with early adopters such as the billionaire investment mogul, Jim Mellon.
Prospective investors were apprised that the longevity technology is still in its infancy and the current players in the industry have barely scratched the surface. Anyone interested in investing in this pioneering field should be patient and should not expect quick turnarounds on their investments.
Creating a Swiss “Longevity Valley”
The co-host of the Longevity Investors Conference, Marc Bernegger, also talked about how essential it is to create an eco-system for the longevity industry. Something like the silicon-valley should be created so that the longevity companies work collectively and grow mutually.
What better place for it than Switzerland?
Switzerland has a superb healthcare system and already has the worlds leading pharmaceutical and biotech companies operating in the country. The country is also politically stable which means that scientific progress will not face any impediments. It also has the worlds leading financial system as well which will be essential to raise investments and financing.
Switzerland also has the second-highest life expectancy (avg 83.3 years) in the world and appears to have an appetite for longevity.
Final Words on the Longevity Investment Trend
For the investor, the key to investing in longevity will be managing your risk. The winning strategy would be to hold a diversified portfolio of longevity investments. You only need to be right on a couple of your investments out of the entire portfolio to realize a significant upside.
Please be aware that this is no investment advice from thebankerblog.com. This is just my personal opinion. You should do your own research and/or consult your investment advisor.