MS, Cabinet Secretary for
Economy, Energy and Planning: A statement on the Wales Life
Sciences Investment Fund was made in July 2023 following
liquidation of the fund in February 2023. This statement
addresses the final write-off of losses arising from the fund.
The Wales Life Sciences Investment Fund was set up in 2012
on advice from the Life Science Sector Panel. The fund was
managed by specialist fund manager Arix Capital Management,
procured by the Welsh Government, with the Development Bank of
Wales acting as Fund Holder. A loan of £42.4m was made from the
Welsh Government to the Development Bank of Wales for the
investments made through the fund by Arix Capital Management.
Early stage equity investment in life sciences companies is
inherently high risk. While the fund supported multiple positive
outcomes and met key objectives, financially it made a loss.
The board of the Development Bank of Wales realised previous
accounting impairments to write-off £27.1m in its 2022-23
accounts and notified this to the Welsh Government. Anticipating
a significant loss of value, a cumulative provision for a loss of
£18.9m was reflected in 2023-24 Welsh Government accounts.
The fund was liquidated in February 2023. At that time the
remaining assets, shares in 4 companies, were transferred from
Arix Capital Management to the Development Bank of Wales. At that
time the estimated value of the transferred assets was £2.5m.
The Development Bank of Wales has sought appropriate
opportunities to exit from these investments and values have
continued to be impacted by the market. An exit from the
transferred investments contributed to a repayment of £1.82m to
the Welsh Government. On top of a £20m repayment, which took
place in 2021-22 following a successful exist from the Simbec
Orion investment, total repayments have been £21.82m –
approximately half the value of the original loan.
There is now little prospect of further returns from the
remaining assets. A decision has therefore been taken to complete
the write-off process and to reflect this in the accounts of the
Welsh Government for 2024-25. This is primarily an accounting
matter with the budgetary consequences of the loss being
addressed in prior years through the consolidation of the
Development Bank of Wales accounts into the accounts of the Welsh
Government.
The Public Accounts and Public Administration Committee formally
considered the Fund and its performance on 27th September 2023.
Following correspondence between the Committee and both Welsh
Government and the bank, a final response addressing follow-up
questions on the fund was submitted in March 2025. The
Development Bank's final fund closure summary was also submitted
to the Committee in March 2025.
