Our firm strives to be a reliable, transparent, accountable, and secure investment platform for private and institutional investors as well as an innovative issuer of capital protected fixed income social impact bonds. We have based our strategy on the following cornerstones.
Lux Life Sciences has structured its bonds in such a way that the principal capital is collateralized with income-producing assets with a fast accelerating asset value and a significant upside value potential. Most of these assets are about to make a major breakthrough in global markets as we in fact established supplier partnerships with multinationals.
In some occasions, these assets are already targets for acquisition or qualify for IPO's. We acquire only assets situated in countries with highly developed environmental standards, innovative regulatory framework, sophisticated legal systems, and strong contract enforcement standards, Investments are secured by high quality assets with a value of several multiples of the invested bond principal.
Additional collateral is provided through securitization of the committed revenue streams, mostly originated from high creditworthy multinationals and on basis of multi-year off-take contracts as well as collateralized financial securities are receivables, letters of credit, state export guarantees, bank guarantees, credit insurance, and the cash positions held. In most occasions additional collateral is provided in the format of state subsidies, grants, and tax-incentives as well as intangible assets like the patents, licenses, etc.
The aggregate collateral value is therefore always no less than 100% of the equivalent face value of the bond principal. The assets remain throughout the whole investment period in a dedicated legal structure (compartment) under control of an independent security trustee to ensure no other creditors but the investors have a claim on them and to safeguard that the proceeds are utilized with first priority to reimburse the principal and pay interest obligation to the bondholders.
Lux Life Sciences provides substantially higher coupon rates than other investment grade instruments like sovereign and corporate bonds. At present most of the money market instruments like term deposits, savings have negative interest rates. Yields of real-estate investments have declined significantly and are expected to remain at a fraction of their old levels for many years. With stock prices at exorbitant high level investors face high risks and high volatility while most corporations need several years to make a comeback on their dividends.
We do not make a secret of our financial strategy. We simply invest in income producing assets with significant upside and rapid accelerating asset value potential. Once these assets have a satisfactory exit value we dispose of these assets and capitalize the gains relatively fast, We are able to reinvest in new assets and roll-over the capital and compound returns several times within the bond investment period.
Lux Life Sciences invests in principle only in newly to built assets or existing assets that are already producing profitable income. The income is largely originated from long term contracts with reputable global institutions and corporations with an indisputable credit rating. The payments are often secured by financial securities like state guarantees, credit-insurance, state export guarantees off-take contracts, cash-backed bank guaranties, letters of credit, promissory notes, etc.. These securities have a fixed value, are rapidly turned into liquid cash, and in case of emergency factored or discounted. The credit risk exists of course theoretically, but is fully recoverable.
Lux Life Sciences Investments invests only in assets that utilize proven practices and technologies, certified, accepted, and deployed by industry leaders, under fully executed preferred supplier agreements. The focus is on relatively low CAPEX and OPEX assets, with long economic and technical life time, and with short pay-back terms. In general, these assets can be rapidly and easily re-financed by bank loans, sell, and lease back to ensure short investment periods and high gear cash flows in the portfolio. All assets will be properly insured by insurance providers with minimum A-rating if possible and applicable.
As the currency of the bond principal and the asset in which we invest are the same the bondholders are not exposed to the volatile currency exchange rates and unexpected currency exchange losses. We herewith avoid also the exorbitant cost for hedging and “stop loss” strategies.
Lux Life Sciences values solvency (in the sense of liquidity sufficiency) as a key success factor for our bond investment. We plan ahead for optimal liquidity positions and adjust our cash positions and cash flows throughout the investment period to ensure we can meet coupon payments and cost of servicing of the assets we have in portfolio without risking liquidity shortage.
We create interest and expenses provisions to meet obligations, especially in the first 3 years. We plan for timely asset disposals across the entire investment period and in particular for liquidity sufficiency at bond maturity date. We considers liquidity risk management of significant importance. We have therefore installed a continuous liquidity audit procedure whereby the risk advisor provides on a regular base a certificate of liquidity sufficiency.
Being situated in one of the largest and most professional financial centers, our undertaking is subject to the provisions of the applicable securities acts like the CSSF. We ensure we comply with the latest global accounting standards and the regulatory and statutory reporting requirements. We provide timely and accurate financial reports to our investors and all other stakeholders. We apply only accounting methodologies that are approved by external auditors and actuaries. All administrative, accounting, and auditing operations are undertaken by independent accredited firms. All monetary transactions are conducted by top-rated banks, clearing and settlement institutions.
Lux Life Sciences strives to be fully accountable for results. We do not defer any of the potential risk to our investors’ but only to our shareholders. Residue asset values and dividends are distributed to shareholders only after the principal capital and all interest obligations and expenses have been paid in full. There are no commissions and costs at the expense of our bondholders’ interest or deducted from the principal invested capital, nor do we claim a share of the investors returns upon success. Herewith is not just our accountability guaranteed but also our integrity.
Lux Life Sciences is a true financial innovator. Beyond our capital-protected social impact bonds, we offer a unique blend of fixed-income stability and strategic risk management anchored in high-impact healthcare assets.
