Wellness boom prompts investors to put wealth where their health is

Lee Walton was relaxing by the pool in Dubai when his son Jack phoned from home to say he had agonising stomach pain.

What was suspected to be a burst appendix in need of emergency surgery turned out, after a trip to A&E, to be irritable bowel syndrome.

Mr Walton, 68, a Surrey-based management consultant, recalled a nascent food probiotic supplement, Symprove, created by a friend’s brother, and found in clinical trials to be effective in treating IBS symptoms and to boost digestive health. Still poolside, he called Barry Smith, the biotech start-up’s founder, to arrange for a supply of the live bacteria drink to be sent to his son. Within three days the symptoms had cleared.

So Mr Walton bet bigger. The following year, in 2011, he invested £80,000 in Symprove on the basis of his son’s experience and some backof-the-envelope sums.

“When you realise that 14pc of the British population suffer with IBS, it’s clear there is a market,” he said. “Plus, unlike many of the probiotics already out there, this one was proved to survive in the acidic conditions of the stomach so I knew it was going to go big at some point. It was just a case of when.”

Mr Walton has had to play the long game for a return from a company that lacks a big advertising budget and relies on word of mouth, but is now reaping the rewards.

The explosion in the health and wellness market in recent years and growing awareness of gut health helped Symprove achieve 55pc yearon-year growth in 2019. This summer the business entered a partnership with bd-capital, a private equity firm, for an undisclosed sum, giving Mr Walton a strong return on his initial investment.

“One of the questions I asked when I first considered investment was whether or not they were prepared to sell Symprove at some point,” Mr Walton said. “It was important to me that there was always a get-out plan.”

He is not alone in having put his money where his mouth is – or perhaps his wealth where his health is. But Fiorenzo Manganiello of Lian Group, a Swiss investment company, cautioned against investing blindly on the basis of personal experience.

“A good product and a positive experience often turn companies into profitable businesses,” he said. “Yet in a post-Covid world we have seen a huge rise in health tech firms that heavily invest in marketing but are without robust medical data and are proven as being neither reliable nor effective – so decisions should always be data-led and backed by scientific evidence.”

Adam Hamdy, a 46-year-old crime writer from Shropshire, balanced heart and head when he invested in Ligandal, a genetic medicine company developing a Covid-19 treatment and vaccine after two of his friends contracted the virus in March. “I settled on Ligandal after reading scientific papers published by the chief executive, Andre Watson, and because initial lab results suggest his techniques have been very effective,” said Mr Hamdy, a former strategy consultant for the medical industry with a focus on pandemics.

“It’s a speculative investment so I am taking a risk, but the upside is that you’re looking at potentially massive returns – up to a 100-fold capital gain.”

As well as investing tens of thousands of his own money, he raised more than £100,000 from a group of old friends, mostly bankers, to fund more of Ligandal’s lab trials. “Belief in a product is probably the most important reason for anyone to invest. If you go in only looking at the financial returns, without fully understanding why someone might want the product, you are not going to be so successful.”

Alain Renaud, 51, a former HSBC manager and experienced investor who lives in St Tropez, would agree. Last year he invested £40,000 in One Year No Beer, a programme that helps users reduce alcohol intake, after he and his wife benefited personally.

“I spend to get a return but it is also about supporting the project and accepting there may be a five or sixyear wait – and because the personal experience of the service was so good it’s worth it,” he said.

Justin Modray of Candid Financial Advice said biotech companies could be lucrative investments but were high-risk. He suggested spreading bets across funds that offered access to tens or even hundreds of companies

He named the Legal & General Global Health & Pharmaceuticals Index fund, which invests in more than 170 large companies worldwide, and the Polar Capital Biotechnology fund, which has more exposure to medium-sized and smaller companies. “Even when you opt for funds it still pays to take at least a five-year view, to ride out the inevitable bumps along the way,” he said. “You don’t want to be a forced seller.”