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Conviction Life Sciences publishes prospectus for £100m IPO

221118 CLSC

A new Guernsey domiciled investment company, Conviction Life Sciences (CLSC), published a prospectus on 16 November 2022 for its initial public offering (IPO). The prospectus is availale here.

The IPO is targeting gross proceeds of £100m and CLSC plans to list on the main market of the London Stock Exchange. It is expected that CLSC’s initial admission to the LSE will become effective and dealings will commence on 16 December 2022. The prospectus also includes details of a share issuance programme that allows for further issuance of up to £250m. Investors wishing to participate in the IPO can access it via a placing, an offer for subscription, an intermediaries offer and, in limited circumstances, direct subscriptions. You can access CLSC’s website here.

Long-term capital appreciation from private and public life sciences companies

CLSC’s investment objective is to deliver capital appreciation over the long-term by investing in a high conviction portfolio of both publicly traded and private life sciences and medical technology businesses, based primarily in the UK, Europe and Australasia. It is to be managed by Southampton based Plain English Finance (plainenglishfinance.co.uk), founded by Andrew Craig, who is the portfolio manager, alongside Dr Luke Zhou and Roderick Collins. Reflecting its capital appreciation objective, CLSC has not set a dividend policy and its board does not anticipate that shareholders will receive a dividend.

Issuance costs, fees and expenses

The cost of the initial issue is effectively capped at 2% of gross proceeds as any cost incurred above this will be reimbursed to CLSC by deducting it from the management fee. The management fee is set 1% of net assets, payable monthly in arrears. There is also a performance fee of 10% of above a hurdle of 10% per annum, with a high watermark.

Potential portfolio

CLSC’s investment manager has constructed a portfolio of potential investments that would meet its investment policy and would therefore be suitable for acquisition by the Company. It is describing this as the “Potential Portfolio”, which is illustrated as follows:

CLSC notes that it has not entered into any legally binding agreements to acquire any of the investments referred to in its potential portfolio and so there can be no guarantee that its portfolio, once fully invested, will reflect the Potential Portfolio.

Profile of the typical investor

CLSC’s prospectus says that its ordinary shares are designed to be suitable for institutional investors, professional investors, high net worth investors, professionally advised private investors and retail investors seeking exposure to a high conviction portfolio of both publicly traded and private life sciences and medical technology businesses. Investors should understand the risks and merits of such an investment and have sufficient resources to be able to bear any losses (which may equal up to the whole amount invested) that may result from such an investment. Furthermore, an investment in CLSC should constitute part of a diversified investment portfolio. Private investors who are unsure whether to invest should consider consulting a financial adviser authorised under FSMA to assess whether an investment in the Company is suitable.

As always, we would strongly recommend that anybody interested in CLSC read the prospectus in full (click here to read) before considering making any investment in the fund and, as usual, there are geographic restrictions on who can invest in the fund.

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