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Merchant Group Invests in Biotech

Perth-based boutique financial services firm Merchant Group is readying to hit up investors for a new $250 million fund dedicated to emerging biotech companies. Merchant will officially start raising for the fund on August 1, tapping investors in Perth, Sydney and Melbourne.

It has backed a range of biotech names via its Merchant Opportunities Fund, including PolyNovo, Bard1 Life Sciences, Medical Developments and Race Oncology. Merchant Group managing director Andrew Chapman said he was not interested in backing the large biotechs like CSL and Cochlear, instead keen on uncovering future successes.He said that they will have an active focus and will take both unlisted and listed positions in companies to helpcommercialise the technology for the benefit of all.They favour biotech positions away from the biggest names. believing that most blue-chip investors will already have some of these names in a portfolio and shouldn’t pay a fund manager to invest in them.

Over the last seven years, the Merchant Opportunities Fund has averaged a 27 per cent a year return, after fees. The firm, which has traditionally also found success backing mining and technology companies, also has a stake in soon-to-be listed breast cancer detection biotech company BCAL Diagnostics.

An active investor, Chapman was a leading force behind the overthrow of the 1-Page and Hills boards. He played a role in the PolyNovo turnaround and has been active in a range of other stocks. Chapman said he would continue to play an active role in companies the fund backs. With the Opportunities fund closing with $200 million under management, he said the motivation for the new fund came from missing out on deals in the biotech space due to the size of the fund.

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