Why family offices love biotech…their owners want to live longer

Biotech is hugely popular with family offices. A rough estimate by Family Capital suggests around 20% of all venture investing done by family investment groups goes into biotech and healthcare, which makes it one of the most popular choices of venture investing for the very rich.

Here are some of the big deals done in the sector in the last six months:

• Willett Advisors, the family office of Michael Bloomberg, invested in a biotech company called Finch Therapeutics Group.
• RNT Capital, the family office of Ratan Tata, invested in an India biotech group called Axio Biosolutions.
• Strüngmann Family Office, the investment group of the Strüngmann brothers, invested in BioNTech, a German biotech group.
• The Clermont Group, a Singapore-based private investment group, backed an Indian biotech group called Indiabulls Pharmaceuticals.
• Breyer Capital, the private investment office of Jim Breyer, invested in an artificial intelligence biotech startup called Paige. AI.

And here are some deals done by extremely rich individuals, not through family offices:

• Richard Branson, the founder of the Virgin Group, backed a group called Doctor On Demand.
• Peter Thiel, one of Silicon Valley’s most successful entrepreneurs, backed an Israel-based biotech company called ChemomAb.
• The Duke of Bedford, one of the UK’s wealthiest aristocrats, along with Tim Disney, the great-nephew of Walt Disney, backed a US-based biotech group called Skyhawk Therapeutics.

What do all these investors have in common? They’re all 50 years-old or older. And that might be a big reason why they like biotech investing – they all want to live longer. They are all probably searching for the elixir of life. OK, before this gets too weird, all these investors are also looking to make money from biotech, and they invest in the sector for the same reasons they choose other parts of the tech world – to make a handsome return.

But, Family Capital reckons that the popularity of biotech investing among family offices is also a factor of “the live longer” argument. And this reason isn’t too hard to understand. Almost invariably, when someone reaches their fifties they begin to think more about approaching old age.

That realisation that things are beginning to increasingly move in the direction of old age often leads individuals to try to at least slow down the ageing process. If you’re very rich, apart from staying fit and eating a healthy diet, a way of trying to prolong one’s age is to invest in new medications that might just increase one’s life – and also make a lot of money in the process.

The life longer idea of biotech investing makes even more sense when looking at who’s backing extending life research – which really is trying to find the elixir of life. One of the main biotech groups behind biogerontology research – the science of ageing – is called Unity Biotechnology.

San Francisco-based Unity is getting a great deal of its funding from family investment groups, like Bezos Expeditions, which manages Amazon’s Jeff Bezos’ personal venture investments, Vulcan Capital, part of Paul Allen’s family office, Vulcan Inc., and COM Investments, the family office of the telecoms tycoon, Craig McCaw.

Biotech startups should take note of this trend, and target raising money from older billionaires, because of their desire to live longer…of course, many of them have no doubt reached this conclusion.