A new investment fund structured by JPMorgan Chase and the Bill & Melinda Gates Foundation will, for the first time, allow individual and institutional investors the opportunity to finance late-stage global health technologies that have the potential to save millions of lives in low-income countries.
With $94 million committed by a pioneering group of investors—including anchor support from Grand Challenges Canada (funded by the Canadian government), the German Ministry for Economic Cooperation and Development and the Children's Investment Fund Foundation—the Global Health Investment Fund (GHIF) will help advance the most promising interventions to fight challenges in low-income countries such as malaria, tuberculosis, HIV/AIDS and maternal and infant mortality.
To help mitigate the risk of investing in the clinical development of new technologies, the Gates Foundation and the Swedish International Development Cooperation Agency have committed to partially offset potential losses in the Fund, which will seek a financial return for investors by targeting high-impact technologies with public health applications in both developed and emerging markets.
"GHIF demonstrates the potential for innovative collaborations and thoughtful financial structures to mobilize new sources of capital for social challenges," said Jamie Dimon, chairman and CEO of JPMorgan Chase. "This product brings a diverse group of investors together around the shared objective of developing life-saving technologies in a financially sustainable way."
LHGP Asset Management, a London-based asset manager specializing in sustainable development, will be responsible for originating, managing and exiting GHIF portfolio investments. The Fund's investor group currently includes International Finance, GlaxoSmithKline, Merck, Pfizer, Storebrand and JPMorgan Chase.
"We invest in global health because we know that when health improves, life improves by every measure," said Bill Gates, co-chair of the Bill & Melinda Gates Foundation.
Private sector financing for global health research and development is more important than ever. Philanthropy, government funding and pharmaceutical industry support have built a remarkable pipeline of global health innovations—with as many as 200 new products currently under development—but late-stage clinical trials are costly and development expenses are outpacing charitable support. Traditional investment capital can play a meaningful role in solving this problem, particularly when it is supplied by investors who include the expected social impact of their activities in their return calculations.
"This innovative fund is mobilizing financing for medical advances that could potentially save millions of lives," said Jim Yong Kim, World Bank president. "It shows that we can align the needs of investors with the need for cures for diseases which cause so much suffering in developing countries."
The GHIF will invest in new drugs and vaccines, emerging diagnostic tools, child-friendly formulations of existing products and expanding manufacturing capacity.