Lombard Odier has close its health technology fund, Global HealthTech, following a drastic drop of its assets of 67 per cent from 2021 to 2023, according to Morning Star.
Opening in 2021, the fund was launched to target digital healthcare product assets, but failed to see any growth.
According to Citywire, Lombard Odier’s Global HealthTech fund saw its cumulative returns drop during the fund’s lifetime to less than 50 per cent of the MSCI World/Health Care benchmark average.
In its May 2024 newletter, the fund wrote: “The HealthTech strategy was very out of favour and had another month of negative returns (-1.2 per cent), below +4.0 per cent for the general market.
“The Fund also underperformed its peer group in May, with the iShares Healthcare Innovation ETF up 1.9 per cent and the STOXX Global Breakthrough Healthcare index up 2.3 per cent.
“The best sectors during the month were Technology (+8 per cent) and Utilities (+7.1 per cent), while the worst performers were Consumer Discretionary (0.4 per cent), Healthcare (2.4 per cent) and Consumer Staples (2.5 per cent).”
The newsletter further concluded with a positive outlook for 2024, despite its closure only weeks later.
The newsletter read: “According to our latest estimates, LO Funds–Global HealthTech should provide annual double-digit sales growth in the coming years, with higher earnings growth.
“We believe the digital healthcare trend is in the very early stages of a multi-decade evolution, which is not directly related to the state of the global economy.
“Investors will need steady nerves and patience, but, in our view, this trend offers solid secular growth for the coming decade.”
Citywire reported that a spokesperson for the asset manager told Citywire: “The LOF Global HealthTech was closed in the best interest of our investors as assets under management fell below what was economically efficient for sound portfolio management.
The themes targeted by the strategy became out of favour as investors have tended to focus more on other topics such as AI or GLP-1 disruption.
Despite this, Lombard Odier said the fund’s poor performance has not put them off investing in health technology and they continue to believe there are significant opportunities for investors in the digitalisation of healthcare.
