More driven than ever...the boss of 72 whose fund is a picture of health
IF YOU could bottle what drives veteran fund boss Samuel Isaly at the age of 72 to keep making money for investors, you would make a fortune.
Despite being wheelchairbound, New York-based Isaly is more determined than ever to scour the world for companies that will make double-digit annual returns for investors.
‘I’m more driven than ever,’ he told The Mail on Sunday. ‘I am learning something new every day. It’s in my genes and those of my three children and six grandchildren. We want to be top, the best in everything we do.’
Isaly is managing partner of OrbiMed Healthcare Fund Management, which he set up in 1989 after a career as a healthcare analyst at investment houses Chase Manhattan, Merrill Lynch, Legg Mason and SG Warburg. It now manages assets of £14billion across a range of funds and has offices in Mumbai, San Francisco and Shanghai. He is the majority owner.
Its two flagship trusts in Britain are the £1.1billion Worldwide Healthcare Trust and the £410million Biotech Growth Trust. Both have outstanding long-term records. About 110 employees hunt down investment opportunities in the biotech, pharmaceuticals and healthcare sectors for all OrbiMed’s funds.
‘I am a loquacious guy,’ says Isaly. ‘I once said my objective was to generate annual returns of 20 per cent for investors over an extended period. Now, because of the more challenging economic backdrop it is difficult to find 20 per cent growers so I am looking for firms that will reap average annual returns of 15 per cent. It is about finding fast growers and buying at a sensible valuation. You then hang on to them and you should win as an investor.’
Though Worldwide Healthcare Trust is predominantly invested in US firms, Isaly says some of the more exciting opportunities are now in China. His ‘lack of old to buy new’ policy frees up cash to invest in these and explains why the trust has no holding in drugs giants AstraZeneca and GlaxoSmithKline.
Among the trust’s expanding portfolio of emerging market stocks is Jiangsu Hengrui Medicine, which has developed an agent to fight gastric cancer. ‘A great company,’ says Isaly. ‘Good management with worldwide tentacles and a great growth story.’
Other exciting investments are found in the fund’s exposure to medical technology – ‘medtech’ – stocks. Key holdings include Intuitive Surgical, a US firm that makes robots to help in medical procedures such as hernia repairs and hysterectomies, and Wright Medical Group, a Dutch company that produces artificial ankles and shoulders. Both firms are among Worldwide Healthcare’s top ten holdings.
With the trust’s share price reaching record highs this year, there are fears that some of its holdings are overvalued.
But Isaly is having none of it. ‘We go anywhere in the world to find firms,’ he says. ‘Worldwide, stocks are not overvalued. Yes, there are medtech and healthcare services companies out there pushing new highs, but we believe their valuations are supported and justified.’
Despite their impressive track records, both Worldwide Healthcare and Biotech Growth have suffered sharp price corrections in the past – namely in late 2015. In the year to midJune 2016, shares in Biotech Growth fell in price by 28 per cent. But as Isaly is keen to remind everyone, the good years outweigh the bad. Fifteen per cent per year – Isaly’s Holy Grail.