Sloane Robinson signs ₤12m Oxford spin-out deal

Hedge fund Sloane Robinson is forging into private equity with a ₤12m deal to help commercialise intellectual property created at the Institute of Biomedical Engineering at Oxford University.

One of England’s largest hedge funds, Sloane Robinson, has signed an agreement, initially worth £12 million, with Oxford University to help fund and advise the university’s new Institute of Biomedical Engineering (IBME), in return for stakes in future spin-outs from the Institute.

The deal is a bold strike into the private equity realm for the hedge fund. The deal will be handled by Sloane Robinson through Technikos—a division of the fund’s relatively new independent private equity arm SRPE—and Isis Innovation, Oxford’s technology transfer company.

In addition to the initial funding, Technikos will also provide Isis with support for early stage intellectual property or technology projects with potential commercial value, as well as investment capital, exit strategies, and advice on management, sales, and marketing for any spin-out companies that result. In return, Technikos will receive 50 percent of the equity usually received by the university for any spin-outs, as well as half of the university’s share of royalties from the licensing of IBME technologies developed during the approximately 17-year agreement.

The Institute will occupy part of a £50 million building on Oxford’s Medical Research Campus, which is expected to be open late next year. Technikos’s initial investment will go toward building, equipment, and new staff costs for the Institute.

The deal is a deepening of Sloane Robinson’s already robust connection with the university. “My partners have a long history of financial support for education, and have recently established a program of graduate scholarships at Oxford University through the Sloane Robinson Foundation,” said founding partner George Robinson in a statement. “While this new venture is organised along commercial lines, we strongly believe that deals undertaken by Technikos will only work if there is a balance between financial and academic goals. We are keen to be part of the process of building and development and this agreement with IBME allows us to be just that.”

The new agreement is similar to, though greater in scope than, an unrelated deal earlier this month by the Scottish venture capital company Braveheart Investment Group. Braveheart announced it will invest a minimum of £5 million over up to five years in an agreement with Glasgow’s University of Strathclyde to assist the university in commercialising its intellectual property; Braveheart has also invested £1 million in a pre-existing Strathclyde spin-out, Cascade Technologies, which is developing cascade laser technology. Braveheart has similar arrangements with the Universities of Edinburgh and Glasgow.