UBS Wealth Management has raised a record $471 million for the final closing of the UBS Oncology Impact Fund, an impact investing initiative aimed at developing cancer treatments.

Investments will be made in early stage oncology to accelerate the development of new cures. Cancer care is particularly appropriate for this kind of investment because of a supportive regulatory environment.

The market for cancer drugs is expected to grow faster than for any other disease, due to populations ageing in developed countries and an expanding middle class in emerging markets with better access to care. Oncology is the largest and fastest growing therapeutic area in terms of drug development activity, representing approximately a quarter of total research spend.

Impact investing aims to generate a defined positive social impact as well as a competitive return. It is an attractive area for investors who wish to align their portfolios with their values. It is potentially a highly significant source of capital for oncology, given cancer's wide-ranging social implications.

In addition to investing in early-stage cancer treatments, the Oncology Impact Fund will support academic research and better access to cancer care in the developing world. A portion of any performance fees generated and half of a royalty attached with best efforts to all successful drugs sales will be managed by UBS Optimus Foundation and ultimately fund expanded access to cancer care for children and their families in the developing world. The other half of the royalty amount will be spent on academic grants to promising oncology-related research. The Fund has already struck the first royalty agreement of this type, bringing this innovative practice from theory to reality.

René Mottas, Country Head UBS Luxembourg, said "The UBS oncology Fund enables leading innovation in one of the most important fields of challenge in medicine of our time – cancer – a topic that each and every one can relate to. Helping to channel investments into finding a cure for this terrible illness is rewarding and shows how financial institutions can work for society while supporting clients to invest responsibly".

Jürg Zeltner, President of UBS Wealth Management, said "The record sum raised for the UBS Oncology Impact Fund is a milestone for our work in sustainable investing and for the impact investing industry as a whole. We believe initiatives like this can give hope to cancer sufferers and their families and divert more capital towards finding treatments and cures."

In its capacity as the world's largest global wealth manager, UBS is helping to mainstream impact investing in response to demand from clients and from the community. Examples include the G8-affiliated Social Impact Investment Taskforce (now the Global Social Impact Investment Steering Group) and the WEF's reports on mainstreaming impact investing. UBS contributed to both initiatives and has also integrated impact investing into its regular sustainable investing reports and Opinion Leaders white papers.

UBS Wealth Management's Chief Investment Office has identified a number of other themes as attractive from an impact investing perspective, including textile supply chain innovation, affordable emerging market healthcare, insurance for climate change resilience, and protein alternatives.

Mark Haefele, Global Chief Investment Officer at UBS Wealth Management, sayid "Impact investing gives our clients an opportunity to change the world and earn a financial return simultaneously. Using this growing medium to target cancer, one of the planet's biggest killers, helps fulfil a critical social goal."

Ansbert Gadicke, Co-Founder at bioventure investment manager MPM Capital, which is collaborating with UBS WM on the UBS Oncology Impact Fund, said "We are delighted to be advising UBS on the management of this landmark fund. Over the long term, we hope this collaboration will add significant value in the field of oncology and in ongoing efforts to finance its development."

Oncology

- Every year, cancer affects 14 million people and their loved ones. It causes one in eight deaths worldwide. This number is unfortunately growing, but so are efforts to tackle it.

- The UN expects the global population to reach 10bn by 2050, from 7.3bn today. By 2030 the number of people aged over 60 in developed countries will exceed those under 25.
 
- An aging population will also create opportunities in the healthcare sector. Due to cancer's wider social implications, research in this area is particularly suited to impact investment, which aims to produce a defined social benefit as well as a financial return.

- Oncology is one of the pharmaceutical industry fastest growing and most dynamic segments. Cancer drugs already represent about 10% of the global pharma market, but a wide range of new drugs are coming to market over the next five years which should see cancer drug sales outgrow the broader market:
o A historical growth rate (2010–2015) of 6% could accelerate to a compound annual growth rate of 15% (2015–29).
o The last few years have increasingly seen extraordinary breakthroughs in biomedical innovations. These significant advances are leading to new cures and defining novel ways for addressing previously unmet needs, creating valuable franchises and blockbuster products along the way.

Sustainability assessment

- Despite significant advances, cancer remains a leading cause of death and generates among the highest costs to healthcare systems around the globe. As with many serious diseases, the economic burden of cancer far exceeds the direct cost of treating the disease.

- UBS therefore sees sustainable opportunities for companies developing new treatments to extend and improve the quality of life of cancer sufferers. Sustainable opportunities for companies developing new treatments to extend and improve the quality of life of cancer sufferers.