Since its founding in October 2000, Sectoral Asset Management has focused exclusively on healthcare investments. Our investment philosophy is grounded in the belief that financial performance can go hand in hand with driving lasting benefits for society, through improved health and well-being.
Good health is a precious commodity. Ensuring healthy lives and promoting well-being is essential to sustainable development and, as such, is also an explicit target of the United Nations Sustainable Development Goals. Since inception, Sectoral’s public equity and venture capital investments have focused on medical progress, innovation, and improved access to modern medicine.
Our portfolios comprise biotechnology and pharmaceutical companies developing novel therapies and cures for complex diseases, medical device companies developing innovative technologies that improve patient outcomes, healthcare services and digital health companies that drive greater efficiency within healthcare systems, as well as emerging-market drug and device manufacturers that help increase access and improve affordability of healthcare in developing geographies. Sectoral was one of the first asset managers to offer a dedicated healthcare strategy in the emerging markets.
Sectoral remains committed to its investment philosophy. Our public equity portfolios aim to achieve a positive societal impact by investing at least 80% of assets in companies that are tackling unmet medical needs and improving the health and well-being of people around the globe. Our venture capital arm has developed a proprietary analytical framework to quantitatively measure the positive societal impact of new medicines and medical devices being developed by companies in our portfolios (Whitepaper). We feel privileged to be active investors in the field of healthcare innovation that offers both strong financial returns and tangible societal benefits.
As a signatory to the United Nations Principles for Responsible Investment (PRI), Sectoral Asset Management believes that responsible investing plays a role in achieving the best possible risk-adjusted returns. We aim to identify, monitor, and mitigate ESG risks and opportunities that are, or could become, material to the long-term performance of companies in our portfolios.
We are healthcare specialists and the companies we invest in are well positioned to promote societal benefits of good health and well-being through development of innovative therapies, technologies, and solutions. We recognize that the healthcare sector nonetheless faces material ESG risks. These are primarily related to product quality and safety, affordability and access to medicine, data privacy and protection, marketing practices, carbon footprint and the management of the legal and regulatory environment.
We take an engaged ownership approach towards ESG issues and continue to refine our responsible investment policies. Our ESG policy applies to all public equity funds managed by Sectoral across all markets in which we invest. It is designed around:
- Integration of sustainability criteria into the research, analysis, and investment process.
- Constructive dialogue with company executives with the goal of improving ESG practices and disclosure.
- Companies must meet our minimum standards to be eligible for investment – we exclude worst offenders based on high ESG Controversy scores from Sustainalytics.
- Investments in controversial industries such as tobacco, controversial weapons or coal-based industries are excluded, as Sectoral invests exclusively in listed stocks of companies in the healthcare sector.
- Active ownership through the exercise of our clients’ voting rights in accordance with our Proxy Voting Policy.
Through this approach we aim to improve ESG practices that are material to long-term sustainable value creation of companies in our portfolio holdings.
At Sectoral we recognize that our investment success is driven by the strength and diversity of our team. Our corporate culture fosters a collaborative, high-performance workplace where our team members can contribute their full wealth of experiences and perspectives. We provide all colleagues with opportunities for professional development and training, including on topics related to sustainability. Sectoral also encourages employee community engagement (link).
Sectoral is also acutely aware of the risks associated with climate change. In a bid to reduce our corporate carbon footprint, we have committed to offset 100% of the carbon emissions associated with our air travel. We are collaborating with Taking Root, a Canadian not-for-profit organization that works with smallholder farmers in Central America on reforestation efforts. Planting trees provides both environmental benefits from carbon sequestration and social and economic benefits, by providing the farmers and their communities with additional sources of income. We have offset 100% of our corporate air travel carbon emissions since 2019.
Principles for Responsible Investment: We are signatory to the PRI, the leading global network for investors committed to integrating ESG considerations into their investment decision-making.