Exclusive: Forte rolls out pharma-themed structured products platform

The team behind Luxembourg domiciled Forte Pharma Fund has launched its own securitisation platform to offer clients pharma themed tailor-made investment products.

We hope that the new platform will allow us to reach a wider group of investors interested in pharmaceutical exposure through tailor-made, defined return instruments - Dmitry Reykhart

The platform operates under the name Forte Investment Solutions, a securitisation fund governed by the Luxembourg Law of 22 March 2004. It has been fully operational since 7 November.

The platform serves professional investors looking for targeted exposure to the pharmaceutical and biotechnology sectors through enhanced risk–return structured solutions rather than ‘delta-one’ equity exposure. It requires a minimum subscription of US$100k, in line with regulatory requirements.

The primary motivation behind the launch was to expand the company’s range of pharma-themed products for investors who may find the open-ended reserved alternative investment fund (RAIF) structure less suitable for their portfolios — whether due to a different desired risk/return profile, a preference for target-maturity instruments, or the greater transparency of standalone notes, according to Dmitry Reykhart, director of Forte Investment Solutions.

“We hope that the new platform will allow us to reach a wider group of investors interested in pharmaceutical exposure through tailor-made, defined return instruments,” said Reykhart.

The core focus of the platform remains on derivative-based investment in notes linked to global pharmaceutical companies. Barrier reverse convertibles (BRCs) and similar equity-linked derivatives will form a substantial part of the product range.

At the same time, the securitisation framework will provide significant flexibility.

“We can design fully customised solutions including capital-protected, enhanced-yield and high-income structures — including payoff profiles that are difficult to achieve through standard bank-issued products,” said Reykhart adding that unlike standard bank or broker-provided solutions, the team at Forte combines deep sector expertise with direct co-investment alongside clients.

“At the product level, we are able to incorporate internal credit-enhancement features into the notes, structurally improving the risk–return profile for investors.

“In practice, this provides an additional capital buffer designed to absorb certain losses at maturity — effectively functioning as first-loss protection in favour of investors. As a result, our structures can deliver a more favourable risk–return asymmetry that is difficult to replicate elsewhere in the market,” said Reykhart.

Why is the pharma investment theme getting so much traction these days?

Reykhart: In our view, the renewed interest in the pharmaceutical and biotechnology sectors reflects a gradual shift in investor sentiment.

First, the sector has been trading at unusually low valuation levels for several years. After the pandemic — a period marked by exceptional capital inflows into healthcare — investors rotated out of the theme.

Second, recent regulatory uncertainty, particularly around US drug-pricing policy and tariffs, has acted as a material headwind. This backdrop has started to improve. Pfizer’s recent agreement with the US administration has provided a clearer reference point for policy outcomes and demonstrated that large pharmaceutical companies can negotiate practical arrangements relating to tariffs and market access. This development prompted several other major manufacturers, including AstraZeneca, Eli Lilly, and Novo Nordisk, to enter into structured discussions, collectively helping to reduce the sector-wide policy overhang.

The equity market has reacted accordingly. Drug stocks rallied on the perception that the ‘worst-case scenario’ had likely been avoided, and investors began to factor in a more stable regulatory environment. Should this tone persist, it may signal a broader shift in sentiment, allowing the sector to be viewed again as a defensive growth allocation rather than a subject of political scrutiny.

Taken together, these factors — compressed valuations, reduced regulatory pressure, and a gradual recovery in sentiment — are helping refocus attention on a sector supported by solid fundamentals, inelastic demand, and ongoing scientific progress. 

Forte Pharma Fund

The company’s Forte Pharma Fund, which is run by the same team that looks after the platform, managed assets worth US$52.6m as of 30 November.

The fund aims to generate long-term returns consistent with the preservation of capital, through a strategy focused on structured notes linked to underlyings in the global pharmaceutical and biotechnology sectors.

It was first launched on 1 October 2020 and requires a minimum subscription of US$200k.

In November, the fund delivered a 14.59% gain, marking the strongest monthly performance in its history and the seventh consecutive positive month.

At the end of November, the fund comprised 13 structured notes from seven different issuers. The notes have an average maturity of 15.1 months while the weighted average coupon is set at 22.30% pa. In total, the products offer exposure to 20 different underlying equity names.

Click the link to read the latest Forte Pharma Fund factsheet.

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