£12m punt on spin-offs

June 30, 2006

Hedge fund invests in biomedicine at Oxford, reports Claire Sanders

A major hedge fund is to invest £12 million in biomedical engineering at Oxford University in return for a major slice of any money made from subsequent spin-offs.

The deal, which mirrors a similar one struck between Oxford's chemistry department and what was then the City bank Beeson Gregory, will partly fund a new building for the university's Institute of Biomedical Engineering and see the creation of new jobs.

A group of partners at hedge fund Sloane Robinson have set up a subsidiary, Technikos, to invest in academic institutions. Technikos will receive half of Oxford's share of equity or royalties from any associated spin-offs for a period of 17 years.

George Robinson, one of the founding partners of Sloane Robinson who is now involved with Technikos, said: "This is not a passive investment. We will work with academics to help them take their ideas to market."

He added that there were exciting opportunities for investors who choose to work with universities.

"Traditionally it has been hard for university spin-offs to get venture capital. We believe there is a huge gap in the market, which we are well positioned to fill," he said.

Technikos will also be working with Isis, Oxford's technology transfer arm, to help academics develop their ideas.

Tom Hockaday, managing director of Isis Innovation, said: "This deal with Technikos will not affect a researcher's intellectual property rights. It is the university's share of any equity or royalties that is being halved."

Richard Darton, head of the department of engineering science at Oxford, said: "The new building and the new research programmes will bring together engineers and clinicians in a world-class facility to tackle important illnesses such as cancer and heart disease."

Oxford has already had considerable success in spinning out companies from biomedical engineering.

Powderject, which specialises in the needle-free injection of drugs, was originally spun off in 1993. Ten years later it was acquired by the Chiron Corporation for £800 million.

Fred Cornhill, director of the institute, said: "We are in an increasingly commercial age. To ensure the institute is at the forefront of the business of biomedical engineering as well as at the forefront of research and development, we need deals like this."

The number of companies set up to invest specifically in university technology transfer opportunities is growing. Beeson Gregory, now called the IP Group, is one of the best known and has partnerships with seven universities.


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