IP Group

Description

IP Group is an evergreen investor in early-stage businesses that operate across a wide range of industries, including technology and life sciences. The company, which was founded in 2001, has pioneered the business model of securing long-term partnerships with world-leading universities and then building companies around intellectual property generated from academic research. Additionally, IP Group not only provides funding to young, innovative businesses with great long-term potential, but it also helps them to develop and supports them on their journey towards commercialisation.

In 2017, IP Group acquired Touchstone Innovations, which expanded and diversified the company’s portfolio and also provided greater scale.

We first invested in IP Group in June 2014, with the company joining the Woodford Equity Income Fund’s portfolio.

Investment case summary

The investment case in IP Group revolves around the substantial potential for long-term shareholder value creation that lies within its portfolio of innovative and disruptive businesses. Overall, we are pleased with how IP Group’s portfolio has been progressing and there have been a couple of notably strong performers, such as Oxford Nanopore (a sequencing business) which is now commercialising its sequencing devices. Another example is Ultrahaptics (the world leader in mid-air haptics) – the company continues to enhance its technology and has already secured its first commercial contract with global gaming leader IGT.

The acquisition of Touchstone Innovations in 2017 has added a number of other attractive businesses to the portfolio, including Circassia and Cell Medica (which develops immunotherapies for treating various cancers and infections). Our relationship with IP Group has led to us co-investing in what we consider to be the most attractive of these businesses.

We see substantial future commercial potential within the IP Group portfolio, very little of which is reflected in the current share price. The portfolio is now maturing and Oxford Nanopore, now commercialising its technology and growing rapidly, is an excellent example of what other portfolio companies can achieve. As IP Group further demonstrates the success of its business model, we are confident that the company will command a materially higher share price.

Fund exposure
Equity Income Fund 3.25%

As at 30 November 2018

Segmentation
Geography United Kingdom
Industry Financials
Themes Disruptive technology

Source: Woodford

Share Price

Market Quotes by TradingView

Commentary

New non-executive chairman appointed

IP Group announced today the appointment of Sir Douglas Flint as its new non-executive chairman, effective from 1 November of this year. Previously chief financial officer and then chairman of HSBC, Sir Douglas is a highly-respected corporate director with a wealth of very relevant experience. Many global institutional investors are showing a growing interest in UK intellectual property commercialisation, and his appointment should also open the door to further potential investment from overseas. In our view, this is an excellent corporate appointment that bodes well for the company.

Saku Saha
17 September 2018

Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 745433). Incorporated in England and Wales, company number 10118169. Registered address 9400 Garsington Road, Oxford OX4 2HN.

Woodford Patient Capital Trust plc is incorporated in England and Wales, company number 09405653. Registered as an investment company under section 833 of the Companies Act 2006. Registered address Beaufort House, 51 New North Road, Exeter, EX4 4EP.

The Woodford Funds (Ireland) ICAV (the “Fund”) has appointed as Swiss Representative Oligo Swiss Fund Services SA, Av. Villamont 17, 1005 Lausanne, Switzerland. The Fund’s Swiss paying agent is Neue Helvetische Bank AG. All fund documentation including, Prospectus, Key Investor Information Documents, Instrument of Incorporation and financial reports may be obtained free of charge from the Swiss Representative in Lausanne. The place of performance and jurisdiction for all shares distributed in or from Switzerland is at the registered office of the Swiss Representative. Fund prices can be found at www.fundinfo.com.

© 2019 Woodford Investment Management Ltd.
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