IP Group to invest $200m in Australian research

British intellectual property commercialisation company IP Group has signed agreements with nine Australasian universities to invest $200 million in finding and developing companies involved in disruptive innovation.

The commercialisation agreements — the first of their type in Australasia — have been signed with the University of Adelaide, the Australian National University, the University of Melbourne, Monash University, UNSW Sydney, the University of Queensland, the University of Sydney and the University of Western Australia, as well as the University of Auckland in New Zealand.

IP Group has committed to invest at least $200 million over a 10-year period to fund investments in spin-out companies based on the intellectual property (IP) developed by academics at the nine universities, generated from research in areas such as digital medicine, new medical therapies and quantum computing.

The investment is being supported through a capital raising, which has seen the participation of new shareholders Telstra Super, Temasek and M&G as well as existing shareholders Invesco, Woodford and Lansdowne.

IP Group believes that the nine universities represent a significant source of world-class and potentially disruptive research. The agreements with each university are for an initial 20-year term and seek to support the best and brightest researchers to translate their findings into new and innovative ways to improve the economic and social wellbeing of Australasians.

“The business model we are using is similar to the model IP Group has used successfully in the UK and the US — providing business-building expertise, capital, networks, recruitment and business support,” said Alan Aubrey, chief executive of IP Group. “We believe the model is ideally suited to the Australian and New Zealand markets and represents a significant commercial opportunity for all those involved.”

Group of Eight (Go8) Chair Professor Peter Høj, who is vice-chancellor of The University of Queensland, added: “This investment is a massive vote of confidence from global capital markets in the quality and impact of research and innovation by the Go8 and the University of Auckland.

“We know IP Group is constantly approached to fund university research. It could have placed this $200 million anywhere in what has become a highly competitive arena. That it sought out the Go8 and was also able to attract Australian co-investors cannot be downplayed. It is a significant recognition of Australia’s leading research-intensive universities and the $6 billion a year of research which they undertake.”

The Go8 comprises Australia’s eight leading research intensive universities. Each year the Go8 spends some $6 billion on research — $2 billion of which is spent on medical and health services research. In prominent world rankings Go8 universities are consistently the highest ranked of all Australian and six of its members are ranked in the world’s top 100.

The largest university in New Zealand, the University of Auckland, together with its commercialisation company UniServices, has been ranked as the most innovative university in New Zealand and Australia in the inaugural Reuters Top 75 ‘Asia’s Most Innovative Universities rankings’.

“We’ll be supporting promising opportunities in the fields of health care, technology, cleantech and biotech based on scientific research,” said TelstraSuper Chief Investment Officer Graeme Miller.

“Unlike traditional private market investments, which draw down capital over time, this investment has been immediately deployed into a well-diversified and seasoned portfolio of innovative companies through the purchase of listed shares via an institutional placement,” Miller said.