US election steers healthcare investment trust launch

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Next week’s US election steered the timing for Bellevue Asset Management’s launch of its healthcare investment trust on the London Stock Exchange, the company confirms.

However, the outcome of the election between Democrat Hillary Clinton and Republican Donald Trump will not impact the trust’s positioning.

“The preference from the majority of private bankers and wealth managers was to have the election pass by and then do the capital raise,” says fund manager Daniel Koller.

“If we had done it in summer we’d have been busy with Brexit and then you had the summer break where people would not be receptive to a raise as such.”

The BB Healthcare trust’s admission to the stock exchange is planned for early December.

However, Koller says that the outcome of the election will have little bearing on the investment trust’s portfolio, despite the market regarding a potential Hillary Clinton win as a challenge for the sector.

Paul Major, who will also manage the fund, says: “We’re not particularly troubled by Hillary’s policy proposals as they stand currently and the focus she’s brought to bear on the more egregious areas of drug pricing,” Koller says, adding that they take a long-term view that will span “multiple election cycles”.

Healthcare stocks have not responded positively to Clinton criticism of controversial pricing for medicines like EpiPen and Daraprim.

Major says: “We’ve gone through this before in 1993 when broad healthcare reform was discussed and had a huge impact on sentiment.

“Likewise again in the 2008 to 2010 period when Obamacare looked like it going to happen and healthcare was being discussed.

“The issues with healthcare in the US are incredibly complex and reforming the system in a meaningful way requires legislative change and bipartisan support. We see Hillary as something of a continuity candidate.”

Koller says the election is already creating buying opportunities for the healthcare sector, even with seven days to go until the result is known.

“If these companies have fundamental strength, if these changes to the healthcare system are not to the extreme, there will be upside.”