King, portfolio manager and strategist on Investec’s multi-asset team, helped set up the trust in 1995, using his own money and turning to an institutional investor for more. In the 18 years that have passed since then, King has watched the share price rise from £1 to £10.
"In 1995, when I was senior fund manager at Finsbury Asset Management, we launched Finsbury Pharmaceutical Trust," he said.
"For regulatory reasons, I was the nominal manager but, in practice, I followed the recommendations of our expert adviser, Sam Isaly, to the letter."
"The thesis of the fund was the attractive long-term growth of the sector, the limited investment opportunities for UK investors and the expertise of Sam."
"We raised just £14m, 70 per cent of which came from one institutional investor, and we all chipped in a little of our own money at the issue price of £1."
"Earlier this year, the share price passed the £10 mark. The fund is now called the Worldwide Healthcare Trust, the net assets are over £500m and Sam is backed by over 60 professionals at Orbimed, by far the best team of experts in the sector in the world," he added.
According to FE Analytics, since the launch of the Worldwide Healthcare Trust in March 1995 it has returned 1,099.26 per cent.
It has beaten the IT Biotechnology & Healthcare sector over that time and has considerably outperformed its benchmark – the MSCI World Healthcare index – which has returned 433.59 per cent.
Performance of trust vs sector and index since Mar 1995
Source: FE Analytics
The Worldwide Healthcare Trust has also beaten the index over one, three, five and 10 years. However, it has had a higher annualised volatility than its benchmark over each of these periods.
The trust primarily invests in equities of global pharmaceutical and biotechnology companies, but the management team can also have exposure to alternative investment strategies, such as derivative transactions, to mitigate risk in the portfolio.
The trust currently holds 90.4 per cent in equities, 6.9 per cent in derivatives and 2.7 per cent in convertible bonds.
Roche is the closed-ended fund’s largest individual holding – making up 9 per cent of the portfolio – and it also counts Sanofi and Pfizer in its top-10.
Our data shows various funds and investment trusts count Worldwide Healthcare Trust in their top-10 holdings.
These include the open-ended Henderson Strategic Capital fund, Cayenne IT and the Miton Worldwide Growth Trust.
Despite the Worldwide Healthcare Trust’s stellar track record, King says he still sees it as a long-term opportunity due to the sector’s growth potential and his belief in the management team’s ability.
"The shares were bought for a number of our multi-asset portfolios when I moved to Investec Asset management in 2004 and I still hold them personally," he said.
"There have been periods of a few years when the share price has tracked sideways but patience has been rewarded and the fund has performed twice as well as the benchmark index. The outlook for the sector is as good as ever and the enthusiasm of the managers is undimmed."
"I and we are firm holders," he added.
Worldwide Healthcare Trust is 9 per cent geared and is currently trading on a 5.5 per cent discount to its NAV. The trust’s ongoing charges figure, plus performance fee, is 1.34 per cent.
King hopes that all the investment trusts he currently holds can deliver him comparable success over the long-term. However, in the meantime he says diversification is the key to finding future winners.
"I have no doubt that there are funds which will perform at least as well over the next 17 years. The best way to capture these opportunities is to buy a range of well managed funds in attractive areas of the market and stick to them for the long-term."
"Great returns are achieved by compounding consistently good returns and are never visible at the start," he added.
King currently runs the Investec Managed Growth fund with Philip Saunders, investing mainly in trusts.
The fund counts FE Alpha Manager Alexander Darwall’s Jupiter European Opportunities, Aberdeen Asian Smaller Companies and the Law Debenture Corporation as top-10 holdings.
King’s career began in 1987 when he worked at Finsbury Asset Management and before joining Investec he was a director at JO Hambro Capital Management.
As well as running the Investec Managed Growth fund, he also manages the Investec Multi Asset Protector and Investec Multi Asset Protector 2 funds.
He has been running funds in the IMA universe since December 2005. Over this time King has returned 45.69 per cent while his peer group composite has made 35.38 per cent.