Investing in tomorrow's most

promising science.

Annual Report and Audited

Consolidated Financial Statements

For the year ended 31 December 2022

Registered number: 66847 

US$326.1M

Ordinary NAV

(2021: US$363.0M)

+47.6%

Ordinary NAV growth since inception

(+64.4%)

-10.2%

Ordinary NAV per share growth YTD

(2021: -9.9%)

US$7.0M

Cash / cash equivalents

(2021: US$6.5M)

US$1.54

NAV per Ordinary Share

(2021: US$1.71)

+16.4%

Total shareholder return

since admission

(2021: +71.2%)

-32.0%

Total shareholder return

YTD

(2021: -5.3%)

US$1.21

Price per Ordinary Share

(2021: US$1.78)

Financial highlights

31 December 2022 Highlights

1 Total shareholder return is an alternative performance measure (APM).

For more information, please refer to APM deﬁnitions table on page 107.

2 The share price at 29 March 2023 was US$1.06.

70.9%

Of NAV invested in core

portfolio companies

(2021: 66.4%)

Portfolio highlights

Core portfolio companies

(2021: 42)

Privately-held

portfolio companies

(2021: 25)

New core portfolio companies

added in the year

(2021: 21)

Publicly-listed

portfolio companies

(2021: 17)

68%

Of core portfolio companies have

productsin clinical stage programs

(2021: 67%)

RTW Venture Fund Limited is a life

sciences and investment innovation

fund. Through the Group’s capital

and the Investment Manager’s

expertise we’re powering

breakthroughs in biotech and

medtech that will transform the

wellbeing of people around the world.

01 // STRATEGIC REPORT

Highlights 01

RTW at a Glance 02

The RTW Diﬀerence 04

Chairman’s Statement 06

Report of the Investment Manager 08

Our Long-Term strategy 21

Our Strategy in Action 22

Our Business Model 26

Operational and Financial Review

for the Year 28

Our Key Performance Indicators 30

Risk Management 32

Principal and Emerging Risks and

Uncertainties 34

Longer Term Viability Statement 37

Section 172 38

ESG: Environmental, Social

and Governance Topics 40

02 // GOVERNANCE

Biographies of Directors 44

Report of the Directors 46

Corporate Governance Report 49

Statement of Directors’ Responsibilities 54

Directors’ Remuneration Report 55

Report of the Audit Committee 58

03 // CONSOLIDATED FINANCIAL

STATEMENTS

Independent Auditor’s Report 63

Consolidated Statement of Assets

andLiabilities 67

Consolidated Condensed Schedule

ofInvestments 68

Consolidated Statement of Operations 78

Consolidated Statement of Changes

in Net Assets 79

Consolidated Statement of Cash Flows 81

Notes to the Consolidated Financial

Statements 82

Read more online

rtwfunds.com

04 // ADDITIONAL INFORMATION

General Company Information –

Investment Objective and

Investment Policy 101

Glossary 103

Alternative Performance Measures 107

AIFMD Disclosures 108

Schedule of Key Service Providers 109

Deﬁned terms used in the Annual Report

are deﬁned in the Glossary.

Strategic Report Governance Report Financial Statements Additional Information

THE UK & EUROPEAN MARKET

We have identiﬁed and invested in exceptional British

and European scientiﬁc assets. We look to contribute

to these biotech ecosystems by engaging in creation or

ongoing development of new companies around promising

early-stage assets by partnering with universities and

in-licensing academic programs and by providing ﬁnancial

and human capital to entrepreneurs to advance scientiﬁc

programs in development.

Our culture

Members of

the RTW team

2021: 77

Collaboration

We leverage collective intellect

Progress

From research to innovation to reality

Humility

The hunger to learn and improve

Tenacity

We ﬁnd the pathway to success,

no matter the obstacles

Rigour

Obsessing over science & the data

Leadership

The courage to shape a better future

Our new brand

Last year we updated the Company’s

visual identity and logo to better reﬂect

the ﬁrm we are today: a leading global

life sciences investment and innovation

ﬁrm. Our new logo represents deep

thinking, humility, science, collaboration,

and people. Our aim with this new

branding is to embed our culture,

purpose, and vision more fully into our

communications with our stakeholders.

Our Long-Term

Strategy,

page 21

Learn more

about us in our

culture video

Learn more

about this in our

purpose video

RTW at a Glance

Germany, Spain, Switzerland

and the Nordic countries:

Rocket Pharmaceuticals

Netherlands and Belgium:

argenx, uniQure, ProQR,

iTeos Therapeutics

UroGen Pharma,

BrainsWay

JiXing

Our global reach

EUROPE

CHINA

ISRAEL

RTW Global investments

Powering breakthrough

therapies that transform

the lives of millions

OUR PURPOSE

Global life science is more vibrant than ever. Exciting ideas.

Visionary entrepreneurs. Full of potential tocreate life-changing

medicines. Ourgoal is to make sure they do.

RTW Headquarters RTW future oﬃces

Every day, our team’s priority is to

unlock value by advancing early-stage

scientiﬁc development and delivering

innovative therapies to patients in need.

At the core of our business is a set of

guiding principles that shape every

aspect of RTW.

THE US MARKET

RTW has a core focus on the US, with deep coverage

ofopportunities from academia to mid-size public

companies. We apply a full range of deal execution

and company building capabilities.

THE CHINA MARKET

We capture commercialisation opportunities in China by

investing across the venture capital life cycle: from new

company formation to IPO and by bringing successful,

innovative drugs to Chinese patients.

Immunocore

Strategic Report Governance Report Financial Statements Additional Information

0302

The RTW diﬀerence

We connect experience,

skills and data to bring

hidden opportunities

into focus

We are focused on identifying transformative

assets with growth potential across the life

sciences sector. Our approach is driven by

applying deep scientiﬁc expertise with a

long-term investment horizon.

DEEP RESEARCH

We delve deeper into the

science and data to spot

the things others miss.

With breakthrough investing, conviction

is everything. Ours is rooted in

meticulous research.

Opportunities. Potential. Errors. Risks.

They are easily unseen or overlooked,

which is why we rarely give the

consensus a free pass. Instead, we

analyse. We scrutinise. We obsess.

Applying the unique, repeatable

research approach we’ve ﬁne-tuned

over years of successful life sciences

innovation. Combining the best data,

technology, and scientiﬁc insight to

unlock possibilities.

SELECTIVE

Dissecting opportunities with

pinpoint precision. We are not

afraid to commit.

Questioning assumptions. Finding

the answers – whatever it takes.

We cast a wide net, but only the

best biopharmaceutical and medical

technology assets pass the test –

those with the highest probability of

becoming commercially viable products,

and those with the greatest potential

to revolutionise treatment outcomes

for patients.

When we invest, we go all in: our capital,

our time, our hearts and minds. So we

choose our partners carefully, those

who, like us, care less about quick wins

– and more about lasting legacies.

KNOWLEDGE

Investment. Science. Business.

You need all these lenses to see

the bigger picture.

It’s this combination of knowledge

and experience that gives us our edge.

Collaboration is the thread that runs

through everything we do. Expert

doctors, academics, and drug

developers. Seasoned venture

capitalists and investment bankers.

Experienced lawyers, data scientists

and company operators.

We work as one team, applying collective

intellect to spark ideas, solve problems,

avoid pitfalls, strengthen strategies, and

build successful companies around

brilliant people.

FLEXIBLE SOLUTIONS

We have the ﬂexibility to

support companies in the

right way, at the right time.

Drug development rarely follows a linear

path. Every journey’s unique. Whatever

the ups and downs, twists and turns,

wehave the skills to solve problems

andaccelerate progress. From providing

capital and infrastructure to advance

promising academic programs, to

forming new companies. To taking them

public. Creative and practical. We thrive

on building pathways where there are

none. Paving the way for scientists

and entrepreneurs to bring life-changing

therapies to the patients who need them.

LONG-TERM PARTNERS

Close collaborators and

committed partners –

every step of the way.

Bringing new therapies to patients

is a long journey. Audacious dreams.

Heart-breaking setbacks. Electrifying

triumphs. We are here through it all.

Fully invested in the success of our

partners and companies – because

their success is our success.

It’s why we are hands-on. Going further

than many other investors can. Using

our medical and scientiﬁc expertise to

accelerate research. And sharing our

business, legal and banking insights to

help commercial operations ﬂourish.

We choose partners who are as

passionate about revolutionising

medicine as we are.

PEOPLE

It’s a people business. Directing

shared passions toward the

same goal.

Healthcare innovation is hard work.

Easy wins are few and far between.

Those who succeed are the ones who

never lose sight of why it matters. The

true believers. The team players. The no

quitters. These are the people we love

working with. And the people we are.

We come from many diﬀerent

backgrounds, but we’re united in our

purpose to improve the lives of the

people around us. We believe this

diversity is our greatest strength.

Because as we invest in and champion

each other, we all achieve so much more.

Competitive

advantages

Strategic Report Governance Report Financial Statements Additional Information

0504

Chairman’s Statement

William Simpson

Chairman

Building disruptive

companies through

innovative investing

The valuation metrics of the sector

and our portfolio are truly compelling by

historic standards, with many companies

developing great potential therapies

trading at a fraction of long-term

valuation norms.

RTW Venture Fund Limited (the

“Company”), passed its third anniversary

since admission to the London Stock

Exchange (“LSE”) on 30 October 2022.

Since admission, the Company’s NAV per ordinary share

hasgrown by +48% and it has outperformed its relevant

benchmarks through good times for the sector and, recently,

through bad. Despite a -10% decline in NAV this year, I am

pleased to say that the Group (including the Company’s

newwholly-owned subsidiary) outperformed the smaller

capitalisation Russell 2000 Biotech Index by approximately

20% as we begin to witness the early stages of a recovery

forthe sector, which I am conﬁdent that we are very well

positioned to capture.

2022 Overview

After the ﬂood comes the drought. 2021 was a record-breaking

year for private and public biotech ﬁnancing activity. Then 2022

saw IPOs fall to the lowest levels in ten years and follow-on

ﬁnancings return to 2016 levels, which is when the sector

experienced a signiﬁcant drug pricing panic. This yearsaw

actual drug pricing reform as part of the Inﬂation Reduction

Act, which was signed into US federal law in August. At a sector

level there is no impact on revenue growth potential through

2026, which limits its impact on equities today, and in fact

resolves signiﬁcant policy uncertainty. However, there are

likelyto be some unintended consequences that will need

careful navigation.

As a result, of the decline in IPOs, the Group’s cadence

of new investments and IPOs also slowed, albeit not as

dramatically as the sector as a whole. During 2022, the

Groupadded three portfolio companies, Lenz Therapeutics,

Mineralys and Apogee Therapeutics, and exited six core public

portfolio companies, Athira, Biomea, iTeos, Pyxis, Pulmonx,

and Landos and one core private position, RTW Royalty

Holdings 1 (Mavacamtem). In total, the exits crystallised a

c.+1.8% contribution to NAV. Two private portfolio companies,

Cincor and Third Harmonic Bio successfully went public and

one, Orchestra BioMed, announced its intention to combine

with RTW’s Health Sciences Acquisitions Corporation 2,

a deal which subsequently completed in January 2023.

The private portfolio is well funded and fairly valued and a

sector bear market from February 2021 to June 2022 has

created signiﬁcant opportunities for a skilled investor, such

asRTW, that has both scale of scientiﬁc resources and

understanding, together with extensive capital markets

experience and solutions to outpace their less experienced

and less-resourced rivals.

The Investment Manager believes that there remains

signiﬁcant demand for reliable capital to support the

discovery and development of scientiﬁc innovation, and that

there is an opportunity to grow their footprint in the UK and

EU as an active local participant in the biotech ecosystem.

The Investment Manager therefore intends to seek additional

ways of growing demand for the Company’s shares with the

ambition of restoring a premium valuation that can lead to

the growth of the Group and its portfolio. This growth would

assist in the ﬁnancing of an exciting pipeline of new ideas,

based upon the Group’s strategy of founding, investing, and

supporting companies developing next-generation therapies

and technologies that can signiﬁcantly improve patients’ lives.

Accordingly, the Board expects the Group to continue to

achieve a strong performance over the long term and create

value for shareholders.

2023 AGM

The Company will hold its Annual General Meeting on

21 June 2023 to review the annual results and provide

portfolio updates.

We would like to dedicate a part of the meeting to address

questions from our shareholders. At the present time, we

anticipate holding it at Royal Chambers, St Julian’s Avenue,

StPeter Port, Guernsey. We encourage our shareholders to

share their questions here and we will endeavour to answer

as many as we can: RTWVentureFund@rtwfunds.com.

On behalf of the Board, I would like to express my gratitude

for your continued support and wish you all the best for 2023.

William Simpson

Chairman of the Board of Directors

RTW Venture Fund Limited

30 March 2023

which the Company was formerly classiﬁed as for U.S. tax

purposes. A number of custodians eﬀecting transactions

inthe Company's Ordinary Shares informed the Company’s

shareholders that, as a result of the imposition of a new U.S.

withholding tax obligation, they would no longer hold or deal

with the Ordinary Shares if the Company continued to be

classiﬁed as a PTP. This likely led to some selling pressure on

the shares as the 1 January 2023 deadline approached until

the Company changed its tax status on 1 December, which was

subsequently ratiﬁed by an EGM held on 19 December 2022.

We thank our shareholders for their support through this and

are pleased that the share price has recovered signiﬁcantly

since. We are optimistic that it will continue to do so with

further NAV accretion in an improving market environment.

Outlook

Public market valuations are still near historic lows, while

innovation remains at an all-time high. The valuation metrics

of the sector and our portfolio are truly compelling by historic

standards, with many companies developing great potential

therapies trading at a fraction of long-term valuation norms.

At the end of the period, the Group had thirty-eight core

portfolio companies, of which twenty-ﬁve were privately held

and thirteen were publicly listed. All core portfolio companies

were initiated as private investments by the Investment

Manager including three company creations. The core portfolio

represented c. 71% of NAV at the end of the reporting period,

up from 66% at the end of 2021. For the balance of the portfolio,

to mitigate any drag on performance due to excess cash awaiting

deployment into new private assets, the Group invests in a

portfolio of listed companies selected by the Investment

Manager to be representative of positions that are also held in its

other investment funds. At the end of the reporting period, this

represented c. 29% of NAV, down from 37% at the end of 2021.

In the year ended 31 December 2022, the NAV declined by

-10.2% % from US$363.0 million or US$1.71 per Ordinary

Share to US$326.1 million or US$1.54 per Ordinary Share.

The main detractor to the NAV was the markdown in Ji Xing

(c. -2.2% contribution), after the IPO was delayed due to

market conditions, despite a positive operating performance.

The mark to market share price performance of Prometheus

Biosciences (c. +9.1% contribution) and the realised gain in

RTW Royalty Holdings 1 (c. +4.9% contribution), following the

successful sale to Bristol Myers Squibb, were two outstanding

results in a year that saw the Russell 2000 Biotechnology

Index decline by 32.0%. Since admission, the Company’s NAV

per Ordinary Share has appreciated by 47.6% against a -5.3%

decline for the Russell 2000 Biotechnology Index. By any

standard, this is a commendable and consistent degree of

outperformance and testament to the Investment Manager’s

robust business model and expertise.

The Company’s share price fell to a discount to NAV this

yearas did those of many of our investment company peers,

especially those that provide growth ﬁnancing to private

companies. This was, perhaps, exacerbated by a change in U.S.

tax regulation aﬀecting publicly traded partnerships (PTPs),

Strategic Report Governance Report Financial Statements Additional Information

Since its listing on the London Stock

Exchange in October 2019, the Group has

grown the NAV attributable to Ordinary

Shareholders from US$168.0 million to

US$326.1 million by a combination of

investment returns and the issue

ofadditional Ordinary Shares.

The NAV per Ordinary Share has grown 47.6% from $1.04

to $1.54 as of 31 December 2022. Since admission to the

year-end, the share price has lagged NAV growth, returning

+16.4%, as the shares fell, albeit by much less than the wider

market as represented by the Russell 2000 Biotechnology

Index this year.

RTW Investments, LP (the “Investment Manager”, “us”, “we”),

a leading global healthcare-focused investment ﬁrm with a

strong track record of supporting companies developing

life-changing therapies, created the Company as an

investment fund focused on identifying transformative assets

with high growth potential across the biopharmaceutical and

medical technology sectors. Driven by our deep scientiﬁc

expertise and a long-term approach to building and

supporting innovative businesses, we invest in companies

developing transformative next-generation therapies and

technologies that can signiﬁcantly improve patients’ lives.

Together we are harnessing

the potential to accelerate

the revolution in medicine

Roderick Wong, MD

Managing Partner

RTW Venture Fund Limited

Year-end

reporting period

(01/01/2022-31/12/2022)

Previous Year-end

reporting period

(01/01/2021-31/12/2021)

Admission

(30/10/2019)

to 31/12/2022

Ordinary NAV – start of period US$363.0 million US$375.3 million US$168.0 million

Ordinary NAV – end of period US$326.1million US$363.0 million US$326.1million

NAV per Ordinary Share – start of period US$1.71 US$1.96 US$1.04

NAV per Ordinary Share – end of period US$1.54 US$1.71 US$1.54

NAV movement per Ordinary Share -10.2% -12.8% 47.6%

Price per Ordinary Share – start of period US$1.78 US$1.88 US$1.04

Price per Ordinary Share – end of period US$1.21 US$1.78 US$1.21

Share price return

(i)

-32.0% -5.3% 16.4%

Benchmark returns

(ii)

Russell 2000 Biotech -31.3% -26.9% -5.3%

Nasdaq Biotech -10.9% -0.6% 24.7%

(i) Total shareholder return is an alternative performance measure.

(ii) Source: Capital IQ.

Report of the Investment Manager

Table 1. Financial Highlights

Executive summary

Strategic Report Governance Report Financial Statements Additional Information

Report of the Investment Manager

continued

As of 31 December 2022, approximately 71% of the portfolio

was invested in the core portfolio (private and public), a 5%

increase versus 31 December 2021. Within that, the mix

changed slightly. Core private exposure stands at 25% of

NAV,a 3% reduction on last year, while core public exposure

increased by 10% to 46%. We deﬁne core public companies as

companies that were initially added to our portfolio as private

investments, reﬂecting the key focus of the Company’s

strategy. Our investment approach is deﬁned as full life cycle

and, therefore, involves retaining our private investments well

beyond their IPO, hence our core portfolio consists of both

privately-held and publicly-listed companies.

Approximately 29% of the Company’s NAV is currently

invested in other publicly listed companies in lieu of holding

cash for future private investments. This portfolio of assets

has been carefully selected by us, matching, on a pro-rated

basis, the long investments held in our other funds. The

investments represented in this portfolio are similarly

categorised as innovative biotechnology and medical

technology companies developing and commercialising

potentially disruptive and transformational products.

The -10.2% reduction in NAV during 2022 was largely driven

by the “other public” portfolio’s (-9.3% contribution), which

declined roughly in line with the Russell 2000 Biotech Index.

The core portfolio made a small positive contribution to NAV

with the core public portfolio contributing +0.2% and the core

private portfolio detracting -0.1%. Within our core private

portfolio we crystallised gains of +4.9% of NAV when RTW

Royalty Holdings sold Mavacamten to Bristol Myers Squibb.

New portfolio

companies

(2021: 36)

These gains were oﬀset by write-downs across the majority

of our private portfolio based on declining public market

comparables. The positive return of the core portfolio, in

ayear when small cap biotech companies, particularly newly

public ones, performed very poorly, highlights the selectivity

of our process, quality of our investments and value of our full

life cycle approach. Income and Expense (oﬀset by both the

mark to market on the Performance Allocation Share for the

period from 1 January 2022 through 30 November 2022 and

Non-Controlling Interest for the period from 1 December

2022 through 31 December 2022) make up the balance of

returns (-0.7% contribution).

Core portfolio breakdown

Our 2022 new investments

0.4% NAV

Lenz

Therapeutics

Clinical stage biopharma

company developing treatments

for presbyopia

0.3% NAV

Mineralys

Therapeutics

Clinical stage biopharma

company developing treatments

for hypertension

0.6% NAV

Apogee

Therapeutics

Pre-clinical biopharma company

developing treatments for

inﬂammation

On listing, the Company’s core portfolio included six

companies, four of which were developing clinical-stage

therapeutics and two medtech companies developing

transformative devices.

* On 31 December 2022

As of 31 December 2022, the portfolio was diversiﬁed across

treatment modalities, therapeutic focus, and the clinical stage

of programs (Figure 2A-C). While the portfolio remains

dominated by US-based companies (Figure 2D), we are

committed to adding UK and EU-based scientists and

companies in an eﬀort to support the best assets across

Figure 2. Core portfolio breakdown, by (A) modality, (B) therapeutic focus, (C) clinical stage and

(D)geography as of 31 December 2022

the globe and foster local biotech ecosystems. By

constructing the portfolio in such a way, investors can gain

exposure to the most innovative parts of a highly specialised

sector with the explosive potential of companies such as

Prometheus Biosciences (which we expand on below).

The Group now has thirty-eight core portfolio companies

having added three new companies in 2022 alongside seven

disposals. Core portfolio companies added in 2022 are

listed below.

1 Small Molecule

2 Medtech

3 Gene Therapy

4 Antibody

5 Cell Therapy

6 Targeted Protein

Degradation

7 Spec Pharma

A) Modality

1 Inﬂammation

2 Oncology

3 Cardiovascular

4 Neurology

5 Opthalmology

6 Rare Disease

7 Pulmonary

8 Gastrointestinal

9 Orthodontic

10 T1 Diabetes

B) Therapeutics Focus

1 Commercial

2 Pivotal

3 Phase 3

4 Phase 2

5 Phase 1

6 Preclinical

1 US & Canada

2 UK & EU

3 China

D) GeographyC) Clinical Stage

Figure 1. Performance drivers as of 31 December 2022

Decrease

Increase

2022 Contributors to Ordinary NAV (%)

9.1%

4.9%

2.7%

1.0%

0.4%

-0.3%

0.1%

-3.2%

-0.2%

-0.3%

-2.2%

-9.3%

-3.4%

-0.7%

-15.0%

10.0%

15.0%

5.0%

-5.0%

-10.0%

20.0%

Prometheus Bio

RTW Royalty

Holdings (Mava)

Immunocore

Ventyx

RTW Royalty

Holdings (Urogen)

Core private –

valuation up or flat

Core private –

valuation down

Cincor

Third Harmonic

Tarsus

Avidity

Milestone

Monte Rosa

GH Research

Rocket

Tenaya

C4 Therapeutics

Ji Xing

Operating expenses

and osets

"Other" public

positions

Exited core

public positions

-0.6%

-0.7%

-1.1%

-1.8%

-2.0%

-2.1%

Strategic Report Governance Report Financial Statements Additional Information

1110

Key updates for Core Portfolio Companies during 2022:

Portfolio performance and updates

The Company’s NAV has signiﬁcantly outperformed

biotech benchmarks since admission on 30 October

2019,returning +47.6% versus -5.3% and +24.7% for

theRussell 2000 Biotechnology Index and the Nasdaq

Biotechnology Index, respectively. This marks the third

consecutive full year of outperformance against the

morecomparable Russell 2000 Biotechnology Index.

However, the Company’s share price has lagged NAV, returning

+16.4% since admission after a -32.0% return in 2022 compared

with a -31.1% return for the Russell 2000 Biotechnology Index in

2022 and -10.9% for the Nasdaq Biotechnology Index in 2022.

Having trade d ata premium for most of the time from

admission to 31December 2021, the shares fell to a discount in

2022 alongside most investment companies that have exposure

togrowth stage private companies.

Core portfolio

companies

(2021: 42)

Source: Capital IQ

Figure 3. RTW NAV per Ordinary Share vs. RTW.L Share Price and Benchmarks

as of 31 December 2022

JAN

FEB APR MAY JUN JUL AUG SEP OCT NOV DEC

Cincor Pharma

announced pricing of its IPO at US$16.00

per share, raising US$193.6 million and

beginning to trade on Nasdaq Global

Market under ticker “CINC”.

Magnolia Medical Technologies

raised US$46 million in a follow-on

cross-over round where RTW served

as a co-lead investor. Ovid Amadi, PhD,

Senior Analyst at RTW joins Magnolia’s

Board of Directors.

Ji Xing

announced an exclusive licensing agreement with

Lenz Therapeutics to develop and commercialise

LNZ100 and LNZ101 for the treatment of presbyopia

in Greater China. As a part of the transaction, Lenz

Therapeutics has also become the latest addition to

the Company’s portfolio.

Mavacamten

the underlying asset of RTW Royalty Holdings 1

received FDA approval. Soon after, the Company sold

its stake in the royalty to Bristol Myers Squibb for a

signiﬁcant gain.

Beta Bionics

The Company and other aﬃliated funds

of the Investment Manager participated

in a follow-on Series C ﬁnancing round in

Beta Bionics.

Mineralys

Therapeutics

The Company and other

aﬃliated funds of the

Investment Manager

participated in a Series

B ﬁnancing round in

Mineralys Therapeutics,

a clinical-stage biopharma

working on hypertension.

Orchestra BioMed

announced a strategic collaboration with

Medtronic, the closing of US$110 million

private equity ﬁnancing round, and plans

to list on Nasdaq through a merger

with RTW sponsored Health Sciences

Acquisitions Corporation 2.

Immunocore

announced a PIPE ﬁnancing round that

RTW participated in and then announced

continued success in the commercial

launch of Kimmtrak for uveal melanoma.

Third Harmonic Bio

announced the pricing of its IPO at

US$17.00 per share, raising US$185.3

million and beginning to trade on Nasdaq

Global Market under ticker “THRD”.

Avidity Biosciences

announced an FDA partial clinical hold

on new participant enrolment in its lead

program for myotonic dystrophy.

Cincor Pharma

shared positive Phase 2 data for its

hypertension program.

Ventyx Biosciences

shared positive Phase 1 data for its

TYK2 program for autoimmune and

inﬂammatory conditions.

Rocket

Pharmaceuticals

presented a positive data

update on its LADI clinical

trial. Then, in December,

it provided an update

on its Danon program,

stating that the company

anticipates starting a

pivotal clinical trial in

H1’23.

Mineralys

Therapeutics

shared positive Phase 2

data for its hypertension

program.

Rocket Pharmaceuticals

shared positive top line data for its

registrational gene therapy program for

Leukocyte Adhesion Deﬁciency-I (LAD-I), a

rare genetic disorder of immunodeﬁciency

in young children.

Tarsus Pharmaceuticals

shared positive data in the second

Phase 3 trial for their blepharitis demodex

treatment. The company ﬁled a New Drug

Application (“NDA”) with the FDA

in September.

C4 Therapeutics

shared Phase 1 ﬁrst-in-human clinical

data for its targeted protein degradation

program in multiple myeloma that

unfortunately had limited eﬃcacy and

needed to reﬁne its treatment regimen.

Immunocore

received an FDA approval for Kimmtrak

(tebentafusp), its ﬁrst-in-class T-cell

therapy for the treatment of uveal

melanoma.

Beta Bionics

shared results of the multi-center

randomised Insulin-Only Bionic Pancreas

Pivotal Trial for Type 1 diabetes patients

at the American Diabetes Association

(“ADA”) conference. The trial met key

endpoints and showed consistent mean

HbA1c reductions across various patient

subgroups.

Apogee Therapeutics

The Group announced a US$2 million

investment in Apogee Therapeutics,

which is working on developing best-in-

class medicines for immunological and

inﬂammatory diseases. RTW co-lead the

Series B round.

Ventyx Biosciences

Takeda announced the acquisition

of Nimbus’ TYK2-targeting drug, providing

a positive read-through for RTW Venture

Fund Ltd.’s holding in Ventyx Biosciences,

which is also advancing a TYK2-targeting

therapy.

Prometheus Biosciences

reported positive Phase 2 data for its

antibody therapy for inﬂammatory diseases,

suggesting a best-in-class proﬁle.

Cincor Pharma

announced the failure of its Phase 2

trial of baxdrostat for uncontrolled

hypertension by missing a statistically

signiﬁcant diﬀerence between its

treatment and placebo arms.

Third Harmonic Bio

announced the discontinuation of its

Phase 1b study for the treatment of

chronic inducible urticaria.

Avidity Biosciences

announced a positive clinical update on

its proof-of-concept Phase 1 trial for is

antibody-siRNA therapy.

Immunocore

shared ﬁrst in human data

on its PRAME program.

CLINICAL

MILESTONES

FINANCING AND

COMMERCIAL

DEVELOPMENTS

Oct 22

Jun 22

Oct 21

Feb 21

Jun 20

Oct 19

Feb 20

Oct 20

Jun 21

Feb 22

$2.50

Nasdaq Biotech Index

$2.25

$2.00

$1.75

$1.50

$1.25

$1.00

$0.75

`$0.50

Russell 2000 Biotech Index RTW VF NAV RTW Share Price

RTW VF NAV & RTW.L Share price USD

150%

125%

100%

75%

50%

25%

50%

Index Returns %

Strategic Report Governance Report Financial Statements Additional Information

1312

Report of the Investment Manager

continued

Portfolio Holding Initial Investment Valuation/Exit Date MOC

XIRR

Holding Period

(yrs)

Inivata

24/12/2020 18/06/2021 2.62 635.5% 0.5

Prometheus Biosciences 30/10/2020 31/12/2022 14.05 268.6% 2.2

RTW Royalty Holdings 1

13/11/2020 30/12/2022 3.38 129.6% 2.1

Ventyx Biosciences 26/02/2021 31/12/2022 3.36 110.8% 1.8

Iteos Therapeutics

24/03/2020 17/03/2022 3.63 108.2% 2.0

Frequency Therapeutics

17/07/2019 23/03/2021 2.79 85.3% 1.7

HSAC 2 17/07/2020 31/12/2022 4.31 83.0% 2.5

Athira Pharma

29/05/2020 30/06/2022 1.65 56.8% 2.1

Immunocore 13/08/2019 31/12/2022 2.83 39.5% 3.4

Avidity Biosciences 08/11/2019 31/12/2022 2.42 32.5% 3.1

Prometheus Laboratories 31/12/2020 31/12/2022 1.41 18.9% 2.0

RTW Royalty Holdings 2 05/05/2021 31/12/2022 1.32 18.8% 1.7

Mineralys 01/06/2022 31/12/2022 1.08 14.6% 0.6

Pulmonx Corporation

17/04/2020 04/11/2022 1.31 13.1% 2.6

Acelyrin 20/10/2021 31/12/2022 1.12 11.6% 1.2

Ji Xing Pharmaceuticals 10/02/2020 31/12/2022 1.11 7.4% 2.9

Encoded Therapeutics 12/06/2020 31/12/2022 1.18 6.8% 2.6

Magnolia Medical 02/07/2021 31/12/2022 1.05 4.8% 1.5

Tarsus Pharma 24/09/2020 31/12/2022 1.05 2.1% 2.3

Nikang Therapeutics 09/09/2020 31/12/2022 1.03 1.6% 2.3

Numab Therapeutics 07/05/2021 31/12/2022 1.02 1.4% 1.7

Ancora Heart 20/01/2021 31/12/2022 1.01 1.0% 1.9

Apogee Therapeutics 15/11/2022 31/12/2022 1.00 0.0% 0.1

Neurogastrx 25/06/2021 31/12/2022 0.99 -0.3% 1.5

Milestone Pharma 23/07/2020 31/12/2022 0.96 -1.9% 2.4

Lenz Therapeutics, Inc. 13/04/2022 31/12/2022 0.99 -2.0% 0.7

Artiva Biotherapeutics 23/02/2021 31/12/2022 0.94 -3.4% 1.9

Nuance Biotech 07/12/2020 31/12/2022 0.92 -4.1% 2.1

Kyverna 09/11/2021 31/12/2022 0.95 -4.3% 1.1

Beta Bionics 28/06/2019 31/12/2022 0.86 -5.0% 3.5

C4 Therapeutics 02/06/2020 31/12/2022 0.88 -5.8% 2.6

Orchestra Biomed 28/06/2019 31/12/2022 0.86 -7.5% 3.5

Cincor Pharma 22/09/2021 31/12/2022 0.90 -7.6% 1.3

Lycia Therapeutics 02/09/2021 31/12/2022 0.89 -8.3% 1.3

Artios Pharma 27/07/2021 31/12/2022 0.87 -9.1% 1.4

Biomea Fusion

23/12/2020 24/01/2022 0.89 -10.2% 1.1

GH Research Ireland 09/04/2021 31/12/2022 0.79 -12.9% 1.7

Umoja Biopharma 09/06/2021 31/12/2022 0.78 -14.5% 1.6

RTW Holdings LLC (Yarrow) 14/05/2021 31/12/2022 0.88 -16.2% 1.6

Monte Rosa Therapeutics 12/03/2021 31/12/2022 0.73 -16.2% 1.8

Swift Health Systems 27/08/2021 31/12/2022 0.74 -20.1% 1.3

Landos Biopharma

09/08/2019 02/11/2022 0.08 -55.0% 3.2

Tenaya Therapeutics 17/12/2020 31/12/2022 0.16 -59.1% 2.0

Alcyone Therapeutics 08/06/2021 31/12/2022 0.25 -66.2% 1.6

Pyxis Oncology

08/03/2021 08/07/2022 0.22 -70.5% 1.3

Third Harmonic Bio, Inc. 17/12/2021 31/12/2022 0.26 -73.1% 1.0

Visus Therapeutics 26/01/2021 31/12/2022 0.00 -99.4% 1.9

Average 1.54 23.0% 1.88

1 Alternative Performance Measure

2 Exited the position

Table 2. Performance of all private and core public portfolio

investments since inception as of 31 December 2022

Share price at

admission

Share price at

31December 2022

Share price

return %

Rocket Pharmaceuticals US$14.00 US$19.57 +39.8%

Table 3. Performance of Rocket Pharmaceuticals from admission to 31 December 2022

Portfolio grouping % of NAV

Core private 24.6%

Core public 46.3%

“Other” public 29.8%

Cash, due to/from brokers, other (including liabilities such as other payables and accrued expenses) -0.7%

Total 100.0%

As of 31 December 2022, our top ﬁve holdings in the “other public” portfolio were:

• 4.2% of NAV in Argenx (ticker: “ARGX”), a commercial stage multi-pipeline immunology company;

• 1.8% of NAV in Axsome Therapeutics (ticker: “AXSM”) a commercial staged biotech focused on CNS treatments;

• 1.7% of NAV in Masimo Corporation (ticker: “MASI”) a global medtech company focused on patient monitoring;

• 1.5% of NAV in PTC Therapeutics (“PTCT”), a biotech company developing therapies for rare genetic diseases;

• 1.4% of NAV in Ultragenyx Pharmaceuticals (ticker: “RARE”) a biopharma company addressing rare diseases.

We expect to deploy the capital invested in “other public” assets into private companies as the opportunities arise.

Table 4. NAV capital breakdown as of 31 December 2022

Portfolio Company

% of Company’s

net assets

Private

Public

Company’s %

shareholding

Valuation of

Company’s

investment in US$

YTD

P&L US$

Prometheus Bio 15.2% Public <1% $52,760,400 $33,198,288

Rocket 13.5% Public <5% $46,982,775 -$6,604,656

Immunocore 7.4% Public <1% $25,908,924 $9,935,999

Ji Xing

7.3% Private <15% $25,225,606 -$8,036,798

Avidity 4.2% Public <5% $14,502,829 -$1,268,910

RTW Royalty Holdings (Urogen) 4.0% Private <20% $14,074,846 $1,510,287

Ventyx 2.3% Public <1% $8,025,353 $3,454,534

Beta Bionics 1.6% Private <5% $5,633,890 -$766,537

Orchestra 1.3% Private <5% $4,490,264 -$500,961

NiKang 1.3% Private <5% $4,416,891 -$227,399

Ancora 1.2% Private <5% $4,163,943 $9,122

Tars us 0.9% Public <1% $3,169,037 -$2,050,561

GH Research 0.9% Public <1% $2,981,309 -$4,174,446

Milestone

0.8% Public <5% $2,871,141 -$2,125,030

Umoja 0.7% Private <1% $2,540,152 -$852,790

Magnolia 0.7% Private <5% $2,403,543 $95,829

Encoded 0.7% Private <1% $2,364,636 -$1,872,579

Cincor 0.6% Public <1% $2,175,674 -$683,084

Apogee Therapeutics 0.6% Private <1% $2,102,903 $0

Numab Therapeutics AG 0.5% Private <1% $1,768,384 $49,888

Acelyrin 0.5% Private <1% $1,650,669 $179,485

Nuance 0.5% Private <1% $1,622,898 -$148,311

Neurogastrx 0.5% Private <1% $1,612,974 -$8,329

Kyverna 0.4% Private <1% $1,455,105 -$74,908

Lenz Therapeutics 0.4% Private <5% $1,449,836 -$21,412

Monte Rosa 0.4% Public <1% $1,402,744 -$2,361,254

Alcyone

0.4% Private <5% $1,280,484 -$3,820,806

Mineralys 0.3% Private <1% $1,119,555 $85,324

Lycia 0.3% Private <1% $1,008,626 -$122,674

RTW Holdings, LLC (Yarrow)

0.3% Private <5% $1,001,854 -$133,869

C4 Therapeutics 0.3% Public <1% $926,459 -$7,565,568

Tenaya 0.3% Public <1% $881,791 -$7,331,469

Artiva 0.3% Private <1% $880,074 -$298,454

Artios 0.2% Private <1% $675,895 -$98,421

Swift Health 0.2% Private <1% $649,150 -$228,531

Third Harmonic 0.1% Public

<1% $347,952 -$1,088,132

Prometheus Labs 0.1% Private <1% $186,504 $54,524

Visus 0.0% Private <1% $149 -$2,352,170

Pulmonx 0.0% Public <1% $27 -$896,517

1 Valuations for private portfolio companies on a fair value basis as of 31 December 2022.

2 The valuations of public positions have been calculated using their market capitalisation as at 31 December 2022.

3 In accordance with its valuation policy, the Group applies a discount to its investments in private portfolio companies which become public portfolio companies that

are subject to customary post-IPO lock-up provisions. The valuation policy also includes Level 1 securities purchased at or after portfolio company IPO.

4 Excludes convertible note.

5 Includes pre-funded warrants.

Table 5. Overview of core portfolio companies’ valuations and Company shareholding on 31 December 2022

Strategic Report Governance Report Financial Statements Additional Information

Report of the Investment Manager

continued

1716

Nov-17

Dec-18

Dec-19

Nov-16

Nov-15

Oct-14

Oct-13

Sep-11

Sep-08

Aug-06

Jul-04

Jul-02

Jun-00

Jun-98

Jul-96

Jun-97

Jun-99

Jun-01

Jul-03

Aug-05

Aug-07

Sep-09

Sep-10

Oct-12

May-18

Jun-19

Jun-20

Dec-20

Dec-21

Jun-21

Jul-22

May-17

May-16

May-15

Apr-14

Apr-12

Mar-09

Feb-07

Jan-05

Jan-03

Dec-00

Dec-98

Dec-96

Dec-97

Dec-99

Jan-02

Jan-04

Feb-06

Feb-08

Mar-10

Mar-11

Apr-13

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Mar ‘00 – Mar ‘03

-85% peak to trough

Aug ‘08 – Mar ‘09

-46% peak to trough

Jul ‘15 – Feb ‘16

-52% peak to trough

Feb – Mar 2020

-38% peak to trough

Aug – Dec 2018

-33% peak to trough

Feb ‘21 – May ‘22

-70 % peak to trough

2014

2015

2016

2022

2013

2012

2019

2020

2021

2018

2017

2011

2010

2008

2005

2003

2001

1999

1997

1995

1994

1996

1998

2000

2002

2004

2006

2007

2009

120

Number of deals

Value ($B)

100

Number of deals

Value ($B)

Volume of deals

worth over

US$500 million

totaled

$58B

(2021: $52B)

Portfolio company

RTW representative on the board

Alcyone Piratip Pratumsuwan

Ji Xing Rod Wong, Peter Fong

Magnolia Ovid Amadi

Nikang Rod Wong

Rocket Rod Wong, Gotham Makker, Naveen Yalamanchi

Yarrow Rod Wong, Peter Fong

1 In aggregate these represented 23% of the NAV of the Group at 31 December 2022

Summary of top ﬁfteen core portfolio companies as of 31 December 2022:

As of 31 December 2022, the Group’s core portfolio included thirty-eight companies comprised of pre-clinical to commercial stage biotechnology

companies, companies developing traditional small molecule pharmaceuticals, and med-tech companies developing or commercializing transformative

devices. We selected the Group’s portfolio companies based upon our rigorous assessment of scientiﬁc and commercial potential, opportunities to

positively impact value, and with regard to the valuation of the assets at the time of investment. The table below includes the top ﬁfteen portfolio

companies at the end of the reporting period.

Table 6. RTW representation on portfolio companies’ boards

Portfolio Company Therapeutic Area Clinical Stage Description

Expected

Catalyst % NAV

Prometheus Bio Inﬂammation Phase 2 Precision medicine company focused on IBD, a chronic

inﬂammatory disease of GI tract with the lead antibody

program against TL1A.

Data updates

in Q2 2023

15.2%

Rocket Rare Disease Phase 2 Gene therapy platform company for rare paediatric

diseases. Four clinical programs for Fanconi anaemia,

Danon, LAD, and PKD.

Data updates

in H1 2023

13.5%

Immunocore Oncology Commercial T-cell receptor therapy company focused on oncology

and infectious disease. Lead program for uveal

melanoma.

Launch

updates in H1

2023

7.4%

Ji Xing Cardiovascular,

Ophthalmology

Phase 3 NewCo focused on acquiring rights for innovative

therapies for development and commercialisation in

China.

Series D in H2

2023

7.3%

Avidity Myotonic

Dystrophy

Phase 1 Antibody conjugated RNA medicines company. Lead

program for myotonic dystrophy, a degenerative

disease with no therapy.

Data updates

in Q2 2023

4.2%

RTW Royalty Holdings

(Urogen)

Oncology Commercial Royalty as a part of RTW-Urogen deal based on

revenues of both Jelmyto and UGN‐102.

– 4.0%

Ventyx Autoimmune Phase 2 Clinical stage biotech advancing a promising

immunology pipeline for autoimmune and inﬂammatory

diseases.

Data updates

in Q2 2023

2.3%

Beta Bionics Type 1 Diabetes Pivotal Closed-loop pancreatic system for automated and

autonomous delivery of insulin.

– 1.6%

Orchestra Cardiovascular Pivotal Medical device company focused on developing products

for the treatment of coronary artery disease and

hypertension.

Data updates

in H1 2023

1.3%

NiKang Oncology Phase 1 Biotech using a structure-based design to develop

innovative small molecules against promising molecular

targets in oncology.

Data updates

in H1 2023

1.3%

Ancora Cardiovascular Pivotal Medical device company dedicated to developing

products which target dysfunction of the left ventricle,

the underlying cause of heart failure.

– 1.2%

Tars us Ophthalmology Phase 3 Clinical stage biotech developing ﬁrst-in-class

therapeutics for ophthalmic conditions.

PDUFA Aug

25, 2023

0.9%

GH Research CNS Phase 2 Clinical stage biotech developing therapies to manage

mental disease.

– 0.9%

Milestone Cardiovascular Phase 3 Clinical stage company developing interventions for

tachycardias.

FDA ﬁling H2

2023

0.8%

Umoja Oncology Preclinical Preclinical stage biotech company developing cell

therapies in cancer. The lead program is focused on B

cell malignancies.

– 0.7%

Table 7. RTW Venture Fund core portfolio – Top ﬁfteen positions as of 31 December 2022

Sector review and outlook

We already knew that 2021 was an historic year for small cap

biotech. The Russell 2000 Biotech Index ﬁnished -27%, behind

only 2008’s -31% and 2002’s -54%. Then 2022 tied 2008 for

second from the bottom, with a drop of -31%, a rare two

down years in a row. As a result, the absolute number and

percentage of companies trading at less than 1x market

capitalisation to cash remains near historic highs (37%). This

is despite some meaningful advances in biotech innovation,

most importantly Biogen/Eisai’s lecanemab for Alzheimer’s.

Funding for smaller public companies is scarce. The IPO

market is at its lowest level in a decade and follow-on oﬀerings

declined for the second year in a row, back to the lowest level

since 2016’s drug pricing panic. In sharp contrast, big was

beautiful this year. The NYSE Arca Pharmaceutical Index

(DRG) ﬁnished +5% on the year. In fact, the 36% performance

gap between large and small cap therapeutics adds to last

year’s 50% gap, totaling the largest outperformance for

pharma since 1997-98. Investors are setting aside long-term

risks (most notably Medicare price negotiation and patent

cliﬀs beginning in 2026) and are placing high value on

recession-resistant near-term growth, which pharma is

delivering with its own innovation breakthrough, the Glp1s.

The Glp1s are the ﬁrst class of medicines to deliver

meaningful weight loss with an attractive safety proﬁle,

andearly sales momentum suggests the potential to create

one of, if not the largest drug class in history. Eli Lilly and

Novo Nordisk have surpassed Pﬁzer and Merck as the

secondand third largest biopharma companies, thanks

tothesuccess of Mounjaro and Rybelsus.

The large-cap-weighted Nasdaq Biotech Index lost -11% in

2022. Companies with consistent growth, or those who can

plug pharma patent holes with de-risked blockbuster potential

have been ﬁrst to recover. Overall, we believe this is consistent

with a biotech recovery that is in its earliest innings.

A year ago, our optimism for 2022 stemmed from

expectations for a return to normalcy at the FDA, clarity

ondrug pricing, increased M&A, and the historically large

performance gap between biotech and the broader markets.

The 2022 volume (of deals worth over US$500 million) totaled

US$58 billion, a nice pick-up from 2021’s US$52 billion, the

lowest in the past eight years. Pharma (DRG +5%) and large

cap biotech (NBI -11%) signiﬁcantly outperformed the broader

market and (S&P500 -19%), narrowing the performance gap.

In sum, we have seen signiﬁcant progress against each of

these items. Unfortunately, small caps have so far been left

behind (Russell 2000 Biotechnology Index -31% and XBI -26%),

and our concentration here has correspondingly aﬀected

2022 NAV performance.

Russell 2000 biotechnology industry index value

US Biotech IPOs (1994–2022)

Strategic Report Governance Report Financial Statements Additional Information

Report of the Investment Manager

continued

2014

2015

2016

2022

2013

2012

2019

2020

2021

2018

2017

2011

2010

2008

2005

2003

2001

1999

1997

1995

1993

1994

1996

1998

2000

2002

2004

2006

2007

2009

NME Approvals

Approval Rate (1st Action)

NME Filings/Approvals

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

Approval Rate %

2014

2015

2016 2022

2013

2012

2019 2020 20212018

2017

2011

2010

$60

VC Funding

Follow On

IPO

Royalty

$50

$40

$30

$20

$10

FDA approved

novel new drugs

(2021: 50)

Drugs from

new modalities

(2021: 9)

After the last two years, we think investors have priced in

failure for much of the wave of companies that experienced

setbacks after going public too early. Of the IPO classes of

2020-2021, the average performance is -37% and -50%, with

74% trading below cash. Notable breakthroughs in the past

year have only minimally improved sentiment. This includes

several potential ﬁrst-in-class therapies for blockbuster

markets. In addition to Biogen and Eisai’s Alzheimer’s

breakthrough, Axsome is launching the ﬁrst new class of

oral antidepressants in over half a century, Karuna reported

positive Phase 3 schizophrenia data for a ﬁrst-in-class

muscarinic receptor directed therapy, and Madrigal reported

the ﬁrst successful Phase 3 study ever conducted for fatty

liver disease.

In total, the FDA approved 37 novel new drugs (two of

which came from RTW portfolio companies: Kimmtrak from

Immunocore and Camzyos (mavacamten) from RTW Royalty

Holdings 1). This is down from last year’s 50 and likely reﬂects

an FDA that has struggled post-COVID. Importantly, however,

drugs from new modalities continue to increase: 13 vs 9 last

year. It includes an impressive four gene therapies (vs zero

last year), two bispeciﬁcs, an RNAi, mRNA, cell therapy, ADC,

radiotherapy, and the ﬁrst ever TCR and microbiome

therapies. With innovation from new modalities continuing to

mature and accelerate, we think the swing of the sentiment

pendulum from optimism to pessimism for small companies

creates asymmetric opportunity in front of future potential

breakthroughs. Importantly, several of our core early-stage

therapeutic companies that have suﬀered either alongside

other small caps or due to their own setbacks remain key

positions in the portfolio. Those that have cleared our

re-underwriting eﬀorts have made operational progress

this past year and many are nearing their next value inﬂection

points. We like the asymmetric risk reward in front of these

more mature data readouts in 2023.

Recent cases suggest that the market environment may be

increasingly more likely to reward strong data. In December,

positive data translated to signiﬁcant moves for Madrigal

Pharmaceuticals (+320%), and our own Prometheus

Biosciences (+167%) and Avidity (+91%).

We continue to expect M&A to accelerate given patent

expiries and headwinds from the Inﬂation Reduction Act of

2022 in the second half of the decade, growing pharma cash

balances, small company cost of capital, and lower valuations.

This should help drive better performance for the sector,

which has never been down three years in a row.

Executing on our strategy

We are scientists and entrepreneurs who aspire to change

the lives of patients through innovation, and our mission is

at the heart of everything we do. We power breakthrough

therapies that transform the lives of millions. True value

realisation from transformative products takes time, and in

order to capture that value, it is critical to be involved in and

invested in such companies throughout the various stages of

their development. As a full life cycle investor, we recognise

the importance of providing growth capital along with the

support of an experienced team, if and when it is needed, at

any critical inﬂection point in an asset’s life cycle. Scientiﬁc

development rarely follows a linear path, which is why we are

always thinking about the optimal way to support a company.

This can be achieved through providing growth capital,

creative ﬁnancing solutions, capital markets expertise, or

guidance through investing our time and sharing our collective

experience as directors and stewards of tomorrow’s most

exciting and disruptive companies.

Our full life cycle approach and broad oﬀering of ﬁnancial

solutions for investee companies allows us to capture a

diverseopportunity set. In the ﬁrst half, this was most clearly

demonstrated when we sold our royalty stake in Mavacamten,

the underlying asset of RTW Royalty Holdings 1, to Bristol Myers

Squibb soon after the drug had achieved the primary endpoint

of its Phase 3 trials, achieving a greater than 3x return on our

initial investment in November 2020. We originally acquired

the royalty asset as part of a multi-solution transaction with

Cytokinetics, a promising mid-stage cardiovascular company,

which also included an equity investment, a regional partnering

deal with Ji Xing, and future clinical trial funding. It was a

ground-breaking transaction because, as a single counterparty,

we were able to move quickly to simplify and de-risk the

execution of a process that would otherwise have taken much

longer with the involvement of multiple partners. We believe

that we are the only investment manager who could have

accomplished what we did.

In the second half of the year, our second SPAC, Health

Sciences Acquisitions Corporation 2, announced a proposed

combination with Orchestra BioMed, one of the Group’s

coreprivate holdings. The combination subsequently closed

after year-end and, on 27 January 2023, Orchestra started

trading on Nasdaq Global Market under the ticker “OBIO”.

Simultaneously, the company cemented a strategic

collaboration with Medtronic, a global leader in medical

technology, services and solutions, to develop its “BackBeat

Cardiac Neuromodulation Therapy” as a potential integrated

treatment for cardiac pacemaker patients. We always

believed that Orchestra had promising data and a leadership

team with an exceptional track record of bringing novel

medical technologies to market; now they have that, a new

partnership with a global leader and the ﬁnancial resources

tohelp accelerate their clinical development and position them

for commercial success. In our opinion, this deal validates our

view on and approach to SPACs, which is that they can be an

especially useful tool to bring public-ready companies to the

next stage of their life cycle when the capital markets are

temporarily closed for business.

Our global reach continues to expand with new oﬃces

opened in London and Shanghai. In China, our NewCo Ji Xing,

continues to build out its clinical pipelines with the addition of

an exclusive licensing agreement with Lenz Therapeutics for

their LNZ100 and LNZ101 treatments for presbyopia. As part

of the transaction, Lenz Therapeutics also became the latest

addition to the Group’s portfolio, underlining the value of our

multi-asset approach. In London, we have continued to support

the development of Immunocore with our participation in a

US$140 million PIPE (Private Investment in Public Equity)

alongside a small handful of other investors in July. As a ﬁrm,

we have been supporting Immunocore since their Series A in

2015 and we are proud to be part of a signiﬁcant UK success

story as the company received FDA approval in January for

Kimmtrak (tebentafusp), its ﬁrst-in-class T-cell therapy for

the treatment of uveal melanoma, which subsequently

surpassed most people’s expectations on its commercial

launch. We expect to receive clinical updates from their

highly promising PRAME (Preferentially Expressed Antigen

of Melanoma) program, which could be a blockbuster drug,

in 2023.

From a science perspective, our primary areas of focus

remain in genetic medicines, rare diseases, small molecules,

targeted oncology, medical technologies, antibodies, and next

generation antibody therapies. Our science-led, full life cycle

approach was clearly demonstrated this year by Prometheus

Biosciences’ transformational data from their Phase 2 studies

in ulcerative colitis and Crohn’s disease. The company’s

Anti-TL1A antibody is a new mechanism of action in

inﬂammatory bowel disease (“IBD”) which also leverages

companion diagnostics that may enable a more personalised

and eﬀective treatment for patients suﬀering from the

condition. With best-in-disease eﬃcacy against existing,

commercially validated, mechanisms of action, we believe

Prometheus is set up to capture a signiﬁcant portion of the

multibillion-dollar IBD market. On the heels of the Phase 2

data, Prometheus successfully raised US$500 million in a

follow-on ﬁnancing to advance into Phase 3 development.

Wehave been following the company for several years, starting

in February 2020 when we observed proof-of-concept data

from Pﬁzer, which alerted us to the possibilities of the TL1A

mechanism of action. After further scrutinizing the science

and gaining a better understanding of its companion

diagnostic platform (something which Pﬁzer was not

considering at the time), we co-led the crossover ﬁnancing

in November 2020 when they raised US$130 million ahead

of anchoring their IPO and US$220 million raise in March 2021

at a US$660 million valuation. Prometheus’ market cap now

stands at US$5.5 billion.

None of this is possible without a sound foundation. Our

foundation, or core, is built on our rigorous assessment of the

best private market investment opportunities, which then go

on to realise their ultimate value in the public markets. We

have always been highly selective in this area, focusing only

on companies with well-founded science and attractive

commercial opportunities. We are now beneﬁting from this

discipline in a challenging capital markets environment as our

private portfolio is a reasonable size and is well funded.

Figure4 shows a breakdown of the approximate cash runway

of our core private companies that have negative cash ﬂow.

Ofthe twenty-four companies that do so, the average cash

runway (at current burn rates) is around three years, which

gives them the time to focus on their clinical development

until the funding markets normalise. Of the six companies

with less than one year of runway, two are RTW NewCos,

sothat is by design. Of the remaining four, only two are in

achallenging ﬁnancial position.

FDA Drugs Approval Trend (1993-2022)

US Biopharma funding by type each year ($B/year)

Figure 4. Core private portfolio – approximate

cash runway as of 31December 2022

1 <12M approx. cash runway

2 12M-17M approx. cash runway

3 18M-23M approx. cash runway

4 >24M approx. cash runway

Privately-held

portfolio

companies

(2021: 25)

Strategic Report Governance Report Financial Statements Additional Information

1918

Report of the Investment Manager

continued

Support through full

life cycle investment

A key part of our competitive advantage is the ability to determine at what point in a

company’s life cycle we should support the target asset or pipeline. As a full life cycle

investor, we can provide growth capital, creative ﬁnancing solutions, capital markets

expertise, or guidance through investing our time and sharing our collective experience

as directors and stewards of tomorrow’s most exciting and innovative companies.

Taking a long-term full life cycle approach and having a true evergreen structure enables

us to avoid the pitfalls and structural constraints of venture-only or public-only vehicles.

Our focus is on becoming the best investors and company builders we can be, delivering

exceptional results to shareholders and making a positive impact on patients’ lives.

Our Strategy

in Action

page 25

Identify transformational

innovations

We have developed expertise through our comprehensive study of industry and

academic eﬀorts in targeted areas of signiﬁcant innovation. Thanks to the genome,

there is more clarity around the causes of disease. Coupled with exciting new

modalities that can address genetic diseases in a targeted way, drug innovation

is accelerating.

Our Strategy

in Action

page 22

Build new companies around

promising academic licences

We developed repeatable internal processes combining technology and manpower

tocomprehensively cover critical drivers of innovation globally. We seek to identify

biopharmaceutical and medical technology assets, ascertained through rigorous

scientiﬁc analysis that have a high probability of becoming commercially viable products

and can dramatically change the course of treatment and in some cases bring eﬀective

and/or full curative outcomes to patients.

We have the capabilities to partner with universities and in-license academic

programs, by providing capital and infrastructure to entrepreneurs to advance

scientiﬁc programs. Particularly working in rare diseases, often areas with little

existing research and treatment options, means that forming a rare disease-

focused company is a way of shining a light on this space and creating a roadmap

to eventually developing a curative treatment.

Our Strategy

in Action

page 23

Our Strategy

in Action

page 24

Engage in deep research

to unlock value

Reﬂecting their challenged positions, these two companies,

Alcyone and Visus, were written down by RTW’s Valuation

Committee to the tune of -75% and -99%, respectively,

through 2022. Figure 5 shows the 2022 valuation changes for

all the core private holdings in the portfolio on 31 December

2022. It is important to note that this does not include the

value realisations from RTW Royalty Holdings 1 or the changes

arising from Cincor’s or Third Harmonic’s IPOs. Last year, we

marked down seventeen of the privates we now hold by an

average of 23% and marked up seven by an average of 12%.

Apogee Therapeutics’ valuation remained unchanged as we

only invested in December 2022. 70% of the markdowns

wereprimarily driven by changes to relative comparables or

market-based inputs. On the other hand, 71% of the markups

were primarily driven by idiosyncratic company performance

or a ﬁnancing or transaction. Our Valuation Committee, which

includes an expert internal team, takes a fair value approach

to marking our private portfolio, doing so on a monthly basis,

with the involvement of multiple third-party valuation

companies, with the goal of ensuring there are no surprises

for our investors. The Board reviews and challenges these

valuations in two semi-annual meetings.

In summary, the private portfolio is in good shape and we

havebeen active and fair in our valuation of the individual

holdings. This foundation provides us with the capacity and

the conﬁdence to continue to back our existing holdings

should they need it and make new investments as the

opportunities arise.

Figure 5. Core private portfolio on 31 December 2022 – year to date valuation changes

We believe there is a signiﬁcant demand for reliable capital

providers such as ourselves, to continue to support scientiﬁc

innovation and the development of transformative therapies

for patients. We expect the portfolio’s sector split to remain

close to 80% biopharmaceutical assets and 20% medical

technology assets. In line with prior prospectus guidance,

weanticipate two-thirds of the new investments willbe

madein mid- to later-stage venture companies and one-third

focused on active company building around the discovery and

development or licensing and distribution ofpromising assets.

Key portfolio company events post period end

• In January 2023, Cincor Pharma entered into an

agreement to be acquired by AstraZeneca for a total

deal value of US$1.8 billion, a 206% premium to the prior

closing market value.

• In January 2023, Orchestra BioMed combined with RTW’s

HSAC 2 and started trading on Nasdaq Global Markets

under the ticker symbol “OBIO”.

• On 9 February 2023, Mineralys Therapeutics announced

pricing of its IPO by oﬀering 12 million shares at US$16.00

per share. The shares began trading on Nasdaq Global

Market on 10 February 2023 under ticker “MLYS”. Since

IPO, Mineralys Therapeutics shares have traded down 7.2%

as of 29 March.

• On 28 March 2023, Milestone Therapeutics announced

a$125m strategic ﬁnancing from the Investment Manager

tosupport Milestone’s operations into mid-2025, including

etripamil NDA submission and launch in PSVT.

RTW Investments, LP

30 March 2023

Our long-term strategy is anchored in identifying sources

of transformational innovations by engaging in deep scientiﬁc

research and a rigorous idea generation process, which is

complemented with years of investment, company building,

transactional, and legal expertise.

Swift Health

Encoded

Alcyone

Visus

Artiva

Umoja

Ji Xing

Artios

RTW Holdings,

LLC (Yarrow)

Nuance

Kyverna

Neurogastrx

Ancora

Magnolia

Acelyrin

Prometheus

Labs

RTW Investments

ICAV for RTW Fund 2

Mineralys

Numab

Therapeutics AG

Apogee

Lenz

Therapeutics

NiKang

Orchestra

Lycia

Beta Bionics

60%

Reasons for valuation change:

Performance

Financing / Transaction

Comps / Market

Financial Distress

-120%

40%

20%

-20%

-40%

-60%

-80%

-100%

Transforming the

lives of millions

Our Long-Term Strategy

Strategic Report Governance Report Financial Statements Additional Information

2120

Report of the Investment Manager

continued

Learn more about Avidity Biosciences

www.aviditybiosciences.com

The need

It is estimated that about 40,000 Americans suﬀer from

myotonic dystrophy, a rare genetic muscular dystrophy with

no approved treatment options for patients and their families.

Mission

Avidity is developing antibody oligonucleotide conjugate

(AOC™) therapeutics, which combines the tissue selectivity

ofmonoclonal antibodies and the precision of oligonucleotide-

based therapeutics to overcome barriers to the delivery of

oligonucleotides and target genetic drivers of disease.

Status

In December, Avidity Biosciences announced a positive

clinical update on its proof-of-concept Phase 1 trial for AOC

1001, its antibody-siRNA therapy, for myotonic dystrophy.

Thecompany is also expanding its pipeline in other rare

muscle disorders such as Facioscapulohumeral Muscular

Dystrophy, Duchenne Muscular Dystrophy and others.

Next milestone

Avidity is expected to share AOC 1001 Phase 1 clinical

progress in H1 2023.

Identify transformational

innovations

RTW focuses on identifying

transformational innovations across

the life sciences space, speciﬁcally

backing scientiﬁc programs that have

the potential to disrupt the prevailing

standard of care in their respective

disease areas.

Our strategy in action

Learn more about Prometheus Biosciences

www.prometheusbiosciences.com

The need

Inﬂammatory Bowel Disease (IBD) is a chronic inﬂammatory

condition of the GI tract. The pathology of the disease is mixed

and without a deﬁnitive cause, therefore it represents an area

of a high unmet need for a large proportion of patients.

Prometheus Biosciences is developing an antibody targeting

TL1A, a novel target in IBD. RTW has been an investor in

Prometheus since the ﬁrm co-led the company’s crossover

ﬁnancing US$130 million raise in 2020.

Mission

Prometheus is a biotechnology company developing novel

therapeutic and companion diagnostic product candidates

for the treatment of immune-mediated diseases, starting with

IBD. Its transformational approach brings the power of big

data to immune biology, changing lives through patient-centric

drug design.

Status

In December 2022, Prometheus shared positive Phase 2

clinical data for ulcerative colitis and Crohn’s disease clinical

trials with a successful use of companion diagnostic in IBD.

The data suggests a best-in-class proﬁle for an IBD therapy.

Next milestone

Prometheus is expected to present further clinical data

updates from its Phase 2 trials in IBD in H1 2023.

Our team is comprised of individuals

withmedical and advanced scientiﬁc

training and legal and banking experience,

enabling a deeply diﬀerentiated approach

to research, idea generation and

strategicinvestment.

NAV

15.2%

(2021: 5.6%)

NAV

4.2%

(2021: 4.3%)

Portfolio company

ownership

<5%

(2021: <5%)

Portfolio company

ownership

<5%

(2021: <5%)

Engage in deep research

to unlock value

Strategic pillar: Strategic pillar:

1 2

Strategic Report Governance Report Financial Statements Additional Information

2322

JX08: Demodex blepharitis

Danon Disease (AAV)

Leukocyte Adhesion Deﬁciency (LVV)

BAG3-Associated Dilated Cardiomyopathy

Fanconi Anaemia (LVV)

Pyruvate Kinase Deﬁciency (LVV)

PKP2-Associated Dilated Cardiomyopathy

OMECAMTIV MECABRIL: HfrEF

AFICAMTEN: nHCM

ETRIPAMIL: PSVT

AFICAMTEN: oHCM

AFICAMTEN: HfpEF

ETRIPAMIL: Atrial ﬁbrillation (Aﬁb)

OC-01: Dry eye disease

OC-02: Dry eye disease

LNZ100/101: Presbyopia

ASO TECHNOLOGY

DiscoveryCompany Preclinical Phase 1 Phase 2 Phase 3

Build new

companies

We engage in new company formation

around promising academic licences

and beyond. We have the capabilities to

partner with universities and in-license

academic programs, by providing capital

and infrastructure to entrepreneurs to

advance scientiﬁc programs. We are well-

placed to oﬀer support to early-stage life

sciences companies and NewCos.

Company creation:

Our strategy in action

continued

Support through full

life cycle investment

Drug development is not a linear

process. There are advancements

and setbacks and we are structured

to maximise value creation at any

point beginning with company

creation to late-stage venture and

into publicly traded markets. We let

the fundamentals and not market

movements dictate our investment.

The need

Orchestra BioMed is a biomedical innovation company

accelerating high-impact technologies to patients. Its

ﬂagship product candidates include BackBeat Cardiac

Neuromodulation Therapy™ (CNT™) for the treatment of

hypertension, a signiﬁcant risk factor for death worldwide,

and Virtue® Sirolimus AngioInfusion™ Balloon (SAB) for the

treatment of atherosclerotic artery disease, the leading

cause of mortality worldwide. The Company has been

invested in Orchestra Biomed since the time of its listing

on LSE in 2019.

Mission

Orchestra Biomed’s partnership-enabled business model

focuses on forging strategic collaborations with and licensing

patented technologies to leading medical device companies

to drive successful global commercialisation of product

candidates we develop. The company focuses on advancing

promising therapeutic solutions, such as BackBeat CNT

and Virtue SAB, through late-stage clinical research and

regulatory approvals, while our partners focus on leveraging

their commercial expertise and existing infrastructure to

bring our product candidates to global markets quickly

and eﬃciently.

Status

In July 2022, Orchestra Biomed announced its plans to

list on Nasdaq through a merger with Health Sciences

Acquisitions Corporation 2 (HSAQ), an RTW-sponsored

SPAC. The RTW team has been delighted to support

Orchestra in a turbulent public markets environment and

provide an alternative path to becoming a public company.

Next milestone

The business merger occurred in January 2023 with

Orchestra Biomed trading on Nasdaq under ticker “OBIO”.

The transaction had negligible P&L impact as we had

anticipated a successful completion in our 31 December

2022 NAV.

Learn more about Orchestra Biomed

www.orchestrabiomed.com

NAV

1.3%

2021: 0.6%

Portfolio company

ownership

<1%

2021: <1%

Strategic pillar: Strategic pillar:

3 4

Strategic Report Governance Report Financial Statements Additional Information

2524

Our Business Model

Shaping tomorrow’s most

disruptive companies

What we need to create value

Experienced

team

A collaborative team of doctors,

academics, and drug developers

coupled with seasoned venture

capitalists, investment bankers,

lawyers and company operators

with a strong culture of compliance.

Full life cycle

investing

Taking a long-term, full life cycle

approach and having a true

evergreen structure helps us

avoidthe structural constraints of

venture-only or public-only vehicles.

Global reach

Great science takes place

everywhere in the world. Our

priority is to unlock value by

advancing early-stage scientiﬁc

development and delivering

innovative therapies to patients

inneed.

Scientiﬁc rigour

Our research process combines

wide data-gathering with deep

analysis to identify the most

compelling assets, technologies,

and modalities with the best

chance of reaching patients.

We power breakthrough

therapies that transform

the lives of millions

Value createdHow we create value

Identify transformative assets with high growth potential across the

biopharmaceutical and medical technology sectors. Driven by our deep

scientiﬁc understanding and long-term approach to supporting innovative

businesses, we invest in companies developing next-generation therapies

and technologies that can signiﬁcantly improve patients’ lives.

Identify transformational

innovations and unmet needs

We focus on identifying transformational innovations and

unmet needs across the life sciences space, speciﬁcally

backing scientiﬁc programs that have the potential to

disrupt the prevailing standard of care in their

respective disease areas.

Invest in deep research

and long-term relationships

We believe in developing long-term relationships

with great entrepreneurs and scientists who are as

passionate about medicine as we are and working

closely with our peers to support companies at any

stage of their life cycle.

Support through full

life cycle investment

A key part of our competitive advantage is the ability

todetermine at what point in a company’s life cycle we

should support the target asset or pipeline. As a full life

cycle investor, we can provide growth capital, creative

ﬁnancing solution, capital markets expertise, or guidance

through investing our time and sharing our collective

experience as leaders of tomorrow’s most exciting and

disruptivecompanies.

Our Strategy

in Action

page 22

Our Strategy

in Action

page 24

Our Strategy

in Action

page 25

We are full life cycle investors creating

value and oﬀering support at any stage,

from academic programs all the way to

mature publicly traded companies.

RTW Charitable Foundation

Founded as the Charitable Foundation arm of RTW,

RTWCF partners with organisations conducting disease

research and championing humanitarian causes.

Number of

humanitarian grants

(2021: 9)

8 COVID Recovery grants in NYC, 1 STEM

education grant in NYC (BioEYES), and 1

emergency response grant for Ukraine (Razom).

Portfolio companies

We support teams through the inevitable setbacks

that occur when introducing a ﬁrst-in-class or

disruptive therapy.

NAV deployed into core

portfolio companies

70.9%

(2021: 66%)

Shareholders

Privileged access to private markets

and bespoke negotiated opportunities.

NAV per ordinary share

growth since inception

+47.6%

(2021: 38.1%)

Total shareholder return

since admission

+16.3%

(2021: 71%)

Patient beneﬁts

Innovation is the best medicine. We believe solving

unmet patients’ needs is the best way to create value.

Core portfolio

companies with clinical

stage programs

25/39

(2021: 34/42)

Drugs commercialised

by our 10 most successful

investments since inception

(2021: 10)

Strategic Report Governance Report Financial Statements Additional Information

Leading with innovative

asset creation

Market capitalisation

The Company’s market capitalisation declined from

US$378million at 31 December 2021 to US$257 million at

31December 2022. The Company issued no shares during

theyear and did not repurchase any shares so the decline in

the market capitalisation of its shares is solely attributable

tothe decline in the Company’s share price.

Ordinary NAV

The Ordinary NAV of the Company declined from

US$363million to US$326 million during the year. The

maindriver of the decline was the share price performance

ofpublicly-listed portfolio companies within the Group’s

portfolio as realised gains from the sale of private investments

were oﬀset by fair value write downs of the remaining private

investments. The majority of the private portfolio’s fair value

(excluding royalty investments) is made up of convertible

preferred stock and convertible notes, which oﬀers a degree

of downside protection given their senior positioning in the

capital structure. Additionally, in thelast three months

before year end, the majority of the private investment

valuations were updated by independent third-party valuers.

An approximate attribution of the Group’s performance

is provided below:

Private Core Realised Gain +4.9%

Private Core Mark to Market -5.2%

Public Core Mark to Market +0.1%

Other Public Mark to Market -9.3%

Income, Expense and Other Oﬀsets

-0.7%

Net Performance -10.2%

1 Other Oﬀsets are both the mark to market on the Performance

Allocation Share for the period from 1 January 2022 through

30November 2022 and Non-Controlling Interest for the period

from 1 December 2022 through 31 December 2022.

Highlights

Understand our

Key Performance

Indicators

page 30

Market Capitalisation as of 31 Dec 2022

Ordinary NAV as of 31 Dec 2022

Premium to NAV discount as of 31 Dec 2022

Ongoing charges as of 31 Dec 2022

NAV per Ordinary Share

The -10.2% decline in NAV per Ordinary Share was driven by

the decline in the Company’s ordinary NAV as the number of

shares in issue did not change during the year.

Premium / discount

The Company’s shares traded on average at a c. 12% discount

due to reduced market demand for growth and venture

capital assets during the reporting period. At the year-end,

the Company’s Ordinary Shares were trading at a 21.2%

discount to NAV (2021: 4.1% premium to NAV; 2020: 4.1%

discount to NAV).

Total return to shareholders

based on ordinary NAV

As the Company has not paid dividends, the negative total

return for the year of -10.2% (2021: -12.8%) equates to the

decline in NAV per Ordinary Share. There was no performance

allocation triggered during the reporting period as the total

shareholder return based on ordinary NAV movements

was negative.

Total return to shareholders

based on share price

The negative share price return of -32.0% in the year

compared to the NAV movement of -10.2% was the result

of a decline in demand for growth companies that are not

currently proﬁtable as interest rates increased in the US

and UK. Investors also assumed that private companies within

venture capital portfolios would be subject to substantial

market-based valuation adjustments leading to a cyclical

widening of share price discounts. Companies with the highest

proportion of private growth assets experienced the most

signiﬁcant widening.

Ongoing charges

The Group’s ongoing charges ratio is 1.92%, calculated in

accordance with the AIC recommended methodology, which

excludes non-recurring costs and interest payable and uses

the average NAV in its calculation.

$257M

$326M

-21.2%

1.92%

$378M

$363M

+4.1%

1.73%

$360M

$375M

-4.1%

1.96%

2022

2021

2020

Strategic Report Governance Report Financial Statements Additional Information

2928

Operational and Financial Review for the Year

Our Key Performance Indicators

Measuring our performance

The Board has identiﬁed the following

indicators for assessing the Group’s annual

performance in meeting its objectives:

Percent of NAV invested in

core portfolio companies

Non-ﬁnancial

KPIs

Geographic & therapeutically

diversiﬁed portfolio

Active and robust pipeline

Level of capital deployment into

core portfolio companies

Measures the Group’s commitment

to invest in best-in-class science and

innovative assets worldwide

Delivers transformational new

treatments and medical devices

to patients in need

• Level of capital deployment

and investment pace, as well as

availability of funds to be deployed

into new portfolio companies or for

follow-on investments into existing

portfolio companies

• Continue to diversify within

life sciences sector, looking for

opportunities globally and also

support local biotech ecosystems

• Balance and breadth of the

pipeline across all clinical stages

• Data readouts and progress

through multiple clinical stages

• Commercial opportunity and

competitive landscape

NAV invested in core portfolio

71%

(2021: 66%)

Deployed into core portfolio

companies

Therapeutic areas addressed

(2021: 10)

Core portfolio companies’ focus spans

multiple therapeutic areas, treatment

modalities and geographies

Portfolio companies have leading

programs in a clinical stage

68%

(2021: 67%)

Capturing a spectrum of early-stage

Phase 1 to late stage Pivotal

Identify transformative assets with

high growth potential across the

biopharmaceutical and medical

technology sectors

Continue investing in and supporting

companies developing next generation

therapies and technologies that can

signiﬁcantly improve patients’ lives

Progress towards delivering

transformational treatments to

patients in areas of high unmet need

Identify

Engage

Build

Support

Identify

Engage

Build

Support

Identify

Engage

Build

Support

The Investment Manager

relies on key personnel

Exposure to global political

and economic risks

Clinical Development

& Regulatory Risks

Exposure to global political

and economic risks

Clinical Development

& Regulatory Risks

Exposure to global political

and economic risks

Clinical Development

& Regulatory Risks

Imposition of pricing controls

Financial KPIs

NAV Growth Total shareholder return Premium/discount to NAV

Performance Performance of the portfolio

companies and cash management

strategy net of all fees and costs

Delivering value to the shareholders The level of supply and demand

for the Company’s shares

Key factors • Portfolio performance and

progression through clinical trials

• Cash management

• Capital pool and deployment

• Scientiﬁc and ﬁnancial risks

• Portfolio performance

• Liquidity of RTW.L shares

• General market sentiment

(in order of impact at year end)

• The percentage of private growth

assets within the Group’s portfolio

• Portfolio performance

• Liquidity of the Company’s shares

• Governance

Progress Ordinary NAV

-10.2%

(2021: -12.8%)

During the reporting period this was

largely driven by public companies’

share price performance

Return

-32.0%

(2021: -5.3%)

Premium/discount to NAV

-12%

(2021: 10%)

(Average during the year)

Future intent Achieve superior long-term capital

appreciation; target an annualised

total return of 20% over the

medium term

Achieve superior long-term capital

appreciation; target an annualised

total return of 20% over the

medium term

Return to par or a premium to NAV

such that total shareholder returns

more closely match NAV performance

Link to

strategy

Identify

Engage

Build

Support

Identify

Engage

Build

Support

Identify

Engage

Build

Support

Link to

principal risks

Failure to achieve

investment objective

Exposure to global political

and economic risks

Clinical Development

& Regulatory Risks

Failure to achieve

investment objective

Exposure to global political

and economic risks

Clinical Development

& Regulatory Risks

Failure to achieve

investment objective

Exposure to global political

and economic risks

Strategic Report Governance Report Financial Statements Additional Information

3130

Applying deep scientiﬁc

expertise with a long-term

investment horizon

Risk management

Risk management structure

Board of Directors

Risk management leadership

RTW Team

Risk management is integral to the investment process and ﬁnancial management Implementing

and monitoring risk controls; risk reporting

Audit Committee

Reviews and monitors the risk framework

Other advisors

Risk identiﬁcation; risk reporting

Portfolio companies’ management teams

Risk identiﬁcation and mitigation

Risk appetite

The Board is willing to accept a level of risk in managing

our business to achieve our strategic goals. As part of the

risk framework, the Board sets the risk appetite in relation

to each of the principal and emerging risks and monitors

the actual risk against that. Where a risk is approaching or

moves to the higher end of what the Board deems to be

acceptable, the Board will consider the actions being taken

to manage it. This year the Audit Committee carried out

a detailed review of the deﬁned risk types, to ensure they

continue to reﬂect the understanding of the Board and

accurately reﬂect the risks we take. Following that review

the Audit Committee recommended to the Board that the

risk appetite remained appropriate, and the Board has

accepted that recommendation.

Principal and

Emerging Risks

andUncertainties

page 34

Our long-term strategy is anchored

inidentifying transformative assets

withhigh growth potential across

thebiopharmaceutical and medical

technology sectors.

Driven by our deep scientiﬁc understanding and a long-term

approach to supporting innovative businesses, we invest

incompanies developing next-generation therapies and

technologies that can signiﬁcantly improve patients’ lives.

With this signiﬁcant opportunity also comes risk.

Our risk framework is overseen by the Audit Committee

under delegation from the Board. Multiple parties contribute

to managing risk, including the Board, the RTW team, and the

Group’s other advisers.

Risk framework

Our risk framework begins with the Investment Policy,

andthe Board, which oversees the Company’s operation in

accordance with the Investment Policy and the process to

ensure a robust assessment of principal and emerging risks

and potential future risks, and receives an update at each

Board meeting. A risk register is maintained that sets out

our principal and emerging risks and how we mitigate them.

The RTW team is responsible for day-to-day operation and

oversight of the risk framework. The RTW team has a culture

of transparency, ensuring that any developments are shared

and addressed eﬀectively with the beneﬁt of input from the

whole team, and reported to the Board where appropriate.

We rely on having highly experienced personnel to support

and manage issues as they arise.

The Audit Committee oversees and monitors the risk

framework, including reviewing the risk register to ensure

itproperly captures the principal and emerging risks,

overseeing the framework for identifying risks (including

potential future risks), reviewing the ongoing operation

andeﬀectiveness of our control environment to manage

theprincipal and emerging risks we face, and ensuring that any

actions identiﬁed are taken forward by the RTW and Elysium

teams as appropriate. This review process provides a focus

todrive continuous improvement in our riskprocesses.

Identifying principal and emerging risks

We evaluate our principal and emerging risks on an ongoing

basis using both top-down and bottom-up inputs. We also

continuously assess future risks that could have a potential

impact. During the year the Board and the Investment

Manager had ongoing discussions to consider current and

potential risks of the Group. The discussions also generated

insights into a range of potential emerging risks and have

helped to focus attention on additional areas for monitoring

by the Board and the Investment Manager.

The RTW team carries out a bottom-up review, considering

each of our life science companies and our internal operations,

both as a speciﬁc exercise and on an ongoing basis through

regular monitoring of our portfolio companies. In doing this

wedraw on the underlying assessments by the management

teams of each of our life science companies. These inputs

arebrought together in our risk register, which is reviewed

bythe Audit Committee in detail each year. The principal and

emerging risks identiﬁed by the Board are set out on pages 34

to 36. These have not substantially changed in the last year,

although COVID-19 is no longer considered to be a principal

risk of the Group. The Board also monitors future risks that

may arise, including the longer-term risks of changes to US

pharmaceutical drug pricing and US FDA productivity.

Strategic Report Governance Report Financial Statements Additional Information

3332

Exposure to global political and economic risks

Principal and Emerging Risks and Uncertainties

Principal risks and

how we mitigate them

Risk description Risk control measure Proﬁle

Failure to achieve investment objective

Counterparty Risk

The Group’s target return on net assets is not guaranteed

and may not be achieved.

The Group has the potential to be exposed to the

creditworthiness of trading counterparties in OTC

derivatives contracts, its prime broker in the event of

re-hypothecation of its investments and any counterparty

where collateral or cash margin is provided or where cash

is deposited in the normal course of business.

The Board will monitor and supervise the Group’s

performance, compared to the target return, similar

investment funds and broader market conditions. Where

performance is unsatisfactory, the Board will discuss the

appropriate response with the Investment Manager.

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The Group uses Goldman Sachs, Morgan Stanley and Bank

ofAmerica Merrill Lynch, JP Morgan and Jeﬀeries as prime

brokers and Cowen, UBS, Bank of America Merrill Lynch,

Goldman Sachs, Jeﬀeries, and Morgan Stanley as ISDA

counterparties. To monitor counter party risk, the

Investment Manager monitors ﬂuctuations in share prices,

percentage changes in daily, monthly, and annual 5-year CDS

spreads and S&P credit ratings. If a counterparty group share

price moves up or down in excess of 20%, the trader at the

Investment Manager is alerted immediately. In case of an

alert, the trader notiﬁes RTW’s Chief Compliance Oﬃcer.

There has been no disruption in operations with the Group’s

counterparties to date. The Group’s bankers are an oﬀshore

branch of Barclays Bank PLC and are also included in the

Investment Manager’s CDS monitoring program.

Operational

Investment

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Decreasing

The Investment Manager relies on key personnel

The Investment Manager relies on the founder of RTW,

Roderick Wong M.D. Roderick Wong is a key ﬁgure at the

Investment Manager and is extensively involved in

investment decisions.

In the event that Roderick Wong was to no longer work for

the Investment Manager or was incapacitated, the Board is

able to terminate the Investment Management Agreement

within 180 days if a suitable replacement has not been found

and would consider whether it was appropriate to wind up the

Group and return capital to shareholders, or to appoint a new

Investment Manager.

Governance /reputational

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Portfolio Companies may be subject to litigation

Portfolio Companies may be subject to product liability

claims. Such liability claims would have a direct ﬁnancial

impact and may impact market acceptance even if

ultimately rebutted.

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The Investment Manager’s due diligence process includes

considering the risk that innovative therapies may have

unforeseen side eﬀects, based on the Investment Manager’s

extensive sector knowledge and experience, published

research, and publicly available information.

Stable

Risk description Risk control measure

External Risks

It is anticipated that approximately 75% of investments

will be in US companies or licensing agreements with US

institutions and 25% of investments will be made outside

of the US. The Group’s investments will be exposed to

foreign exchange, and global political, economic, and

regulatory risks.

The Investment Manager has extensive experience

transacting across the global healthcare marketplace

and will be responsible for identifying relevant events

and updating the investment plans appropriately.

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Stable

Under the FCA’s Disclosure Guidance and

Transparency Rules the Directors are

required to identify the material risks to

which the Group is exposed, and the steps

taken to mitigate those risks.

The Group has ﬁve categories of risks

in its risk register namely:

• Investment Risks

• Operational Risks

• Governance/Reputational Risks

• External Risks

• Emerging Risks

New drugs, medical devices and procedures are subject

toextensive regulatory scrutiny before approval, and

approvals can be revoked.

The Investment Manager’s due diligence process includes

a rigorous process of assessing preclinical and clinical

assets and their probabilities of success to become an

approved product utilizing scientiﬁc, clinical, commercial

and regulatory benchmarks. Additionally, the Investment

Manager’s process of evaluation includes assessing the

likely attitude of regulators towards a potential new

therapy. The due diligence will also consider the unmet

need of the disease and whether the therapy oﬀers

advantages over the current standard of care.

Imposition of pricing controls for clinical products and services

Inﬂation

Portfolio Company products may be subject to price

controls, price gouging claims and other pricing regulation

in the US and other major markets; or government

healthcare systems may be the major purchasers of

theproducts.

The unprecedented level of ﬁscal and monetary stimulus

that has been applied to the global economy has caused

US inﬂation to surge to a 40-year high and resulted in

sharp falls in the share prices of technology ﬁrms without

current earnings.

While future political developments cannot be reliably

forecast, the Investment Manager’s due diligence process

includes an assessment of political risk, and the likely

acceptability of the investee’s pricing intentions.

The creation of value through innovation in the

biotechnology sector outweighs the singular and/or

short-term adjustment to valuation levels arising from

changes in discount rates as a result of rising inﬂation. The

Investment Manager holds investments that have current

earnings and cash-ﬂows and has signiﬁcant exposure to

Phase 3 products which have a high probability of achieving

cash-ﬂows in the near-term. Whilst the pace of interest

rate rises has moderated in reaction to reductions in US

inﬂation it is not possible to say that this risk is reducing

yet as inﬂationary pressures remain.

Clinical Development & Regulatory Risks

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Stable

Strategic Report Governance Report Financial Statements Additional Information

3534

Realising a robust

and resilient company

Assessing the prospects of the Company

The corporate planning process is underpinned by

scenariosthat encompass a wide spectrum of potential

outcomes. These scenarios are designed to explore the

resilience of the Group to the potential impact of signiﬁcant

risks set out below.

The scenarios are designed to be severe but plausible and

take full account of the availability and likely eﬀectiveness

ofthe mitigating actions that could be taken to avoid or

reduce the impact or occurrence of the underlying risks

andwhich would realistically be open to management in the

circumstances. In considering the likely eﬀectiveness of such

actions, the conclusions of the Board’s regular monitoring and

review of risk and the Investment Manager’s internal control

systems, as discussed on page 52, is taken into account.

The Board reviewed the impact of stress testing the

quantiﬁable risks to the Group’s cash ﬂows as detailed in

riskfactors 1-5 in the previous pages and concluded that

theGroup, would have suﬃcient working capital to fund

itsoperations in the following extreme scenario:

(1) The Group incurred NAV losses of 39% of NAV over

athree-year period ending 28 February 2026.

(2) No new capital was raised.

(3) US$45 million of private investments were funded

fromcash and by selling public portfolio investments.

To provide some context for this scenario, the NASDAQ

Biotech Index was in a 26% drawdown at the end of February

and the additional 39% drawdown that we have modelled

simulates a total drawdown of approximately 55% which has

only been exceeded on a rolling 3-year basis once in the life

ofthe index in Q1 2003 at the end of the technology bubble.

The Board considers that this stress testing-based

assessment of the Group’s prospects is reasonable in

thecircumstances of the inherent uncertainty involved.

The period over which we

conﬁrm longer term viability

Within the context of the corporate planning framework

discussed above, the Board has assessed the prospects of

theGroup over a three-year period ending 28 February 2026.

Whilst the Board has no reason to believe the Group will not

be viable over a longer period, given the inherent uncertainty

involved, the period over which the Board considers it

possible to form a reasonable expectation as to the Group’s

longer-term viability, based on the stress testing scenario

planning discussed above, is the three-year period to

February 2026. This period is used for the Investment

Manager’s business plans and has been selected because

itpresents the Board and therefore readers of the Annual

Report with a reasonable degree of conﬁdence whilst still

providing an appropriate longer-term outlook.

Conﬁrmation of longer term viability

The Board conﬁrms that it has carried out a robust

assessment of the emerging and principal risks facing

theGroup, including those that would threaten its business

model, future performance, solvency or liquidity. Based upon

the robust assessment of the principal and emerging risks

facing the Group and its stress testing-based assessment

ofthe Group’s prospects, the Board conﬁrms that it has

areasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall

dueover the period to February 2026.

On behalf of the Board

William Simpson

Chairman of the Board of Directors

RTW Venture Fund Limited

30 March 2023

Longer Term Viability Statement

Principal and emerging risks and uncertainties

continued

Decreasing

Ukraine war

The ongoing war in Ukraine has led to the imposition of

harsh sanctions on Russia and substantial restrictions

onthe ability to transact in Russian securities and trade

with Russian companies. These sanctions and the

corresponding impact on commodity and transport

costshave weighed on the global economy.

The Investment Manager has conﬁrmed that the Group

has no direct or indirect exposure to Russian securities

orassets.

External Risks (continued)

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Risk description Risk control measure Proﬁle

Stable

Emerging Risks

Availability of capital

Funding for early stage venture companies through smaller

public companies is much reduced in comparison to recent

years. The IPO market is at its lowest level in a decade and

follow-on oﬀerings declined for the second year in a row,

back to the lowest level since 2016’s drug pricing panic.

The Russell 2000 Biotech Index of listed LifeSci companies

has declined for a second year in a row to give a cumulative

drawdown of 49.8%, with the 69.9 % fall from 8 February

2021 to 11 May 2022 approaching the worst in recent

decades, being the 84.7% decline from 6 March 2000 to

11March 2003. With a record number of companies trading

at less than 1x their cash balances, the market appears to

believe that not all companies will survive. With reduced

availability of capital allocation to the sector, in particular

through the absence of generalist investors, there may

bethe risk that not all sponsors have enough capital to

support the continued ﬁnancing of all investees.

The Investment Manager is a long-standing full life cycle

investor in the sector, in many instances supplying

commercial expertise and advice to investees in addition

tosupporting successive ﬁnancing rounds. The Investment

Manager is experienced in identifying potential in companies

that have strong fundamentals at attractive valuations that

create an asymmetric and attractive risk/reward proﬁle. The

Board formally reviews the ﬁnancing status of the Group’s

private portfolio with the Investment Manager at least twice

each year at Board meetings. 25% of the Group’s NAV is

exposed to private companies of which only one quarter will

need reﬁnancing within the next 12 months and most of

these companies have re-ﬁnancing plans in place. Out of

these six private companies (amounting to 6.25% of NAV)

two are RTW NewCos, so that is by design. Approximately

29% of the Group’s NAV is currently invested in other

publicly listed companies in lieu of holding cash for future

private investments with a further 46% of NAV invested in

core publicly listed holdings that could also be sold. The

Group has no net borrowings. The Group therefore retains

signiﬁcant access to sources of liquid capital to enable it to

support investees for the foreseeable future.

Liquidity risk

Many investees are not yet at a stage of their life cycle

where they are inherently cash-generative and enjoy

stable, predictable free cash-ﬂow. They have typically

raised signiﬁcant amounts of cash which are then held in

bank deposits and liquid securities to meet operational

requirements until their next planned capital raising round

or IPO. In recent weeks there have been several high-

proﬁle bank failures, some of which, but not all, are to some

extent attributable directly or indirectly to rising policy

interest rates and rising long-term yields in response to

sustained inﬂationary pressures. To the extent that

investees keep their cash on deposit at such banks, there

is a risk that they may suﬀer a partial or total loss of their

capital and suﬀer a consequent liquidity crisis threatening

their ability to continue their planned development.

The Investment Manager closely monitors counterparty

exposures in its portfolio companies. Exposures to recent

bank failures have been minimal in that four portfolio

companies totalling 1.68% of Group NAV had some

exposure to Silicon Valley Bank. Portfolio companies will

typically manage their treasury functions on a prudent

basis, spreading exposure over several counterparties

thereby avoiding catastrophic losses from any single

failure. Where the Investment Manager becomes aware of

signiﬁcant risk concentration it will engage with investees

to encourage more prudent diversiﬁcation. The Board also

notes that, to date, regulators have ensured that no

depositors have lost funds in such banking failures

although it recognises that this may not necessarily

beachieved in the future.

Stable

Increasing

Strategic Report Governance Report Financial Statements Additional Information

3736

Section 172

Close collaborators

and committed partners

Shareholders

Service providers

Portfolio companies

Community &

environment

The Group engages with its shareholders through the issuance

of regular portfolio updates in the form of RNS announcements

and quarterly factsheets.

The Group provides in-depth commentary on the investment

portfolio, corporate governance and corporate outlook in its

Annual and Interim Reports and ﬁnancial statements.

In addition, the Group, through its brokers and Investment

Manager, undertakes regular roadshows to meet with existing and

prospective investors to solicit their feedback, understand any areas

of concern, and share forward looking investment commentary.

The Board receives quarterly feedback from its brokers in

respect of investor engagement and investor sentiment.

The Group has identiﬁed its key service providers and on an

annual basis undertakes a review of performance based on

a questionnaire through which italso seeks feedback.

Furthermore, the Board and its sub-committees engage

regularly with its service providers on a formal and

informalbasis.

The Group will also regularly review all material contracts

for service quality andvalue.

The Investment Manager engages on a regular basis with its

portfolio companies in order to conduct regular on-going due

diligence and to meet obligations if the Investment Manager

holds a board seat.

The Group aims to minimise its environmental footprint.

The Group does not anticipate any material impact to its

business model fromclimate change.

RTW Charitable Foundation represents an extension of

the Investment Manager’s mission. Its research process

helps RTW identify important causes of human suﬀering

and introduces the ﬁrm to individuals and organisations

trying to make a diﬀerence.

Continued access to capital is vital to the Group’s

longer term growth objectives, and therefore,

in line with its objectives, the Group seeks to

maintain shareholder satisfaction through:

• Positive risk-adjusted returns

• Continuous communication of portfolio updates

The Group does not have any direct employees;

however, it works closely with a number of

service providers (the Investment Manager,

Administrator, Sub-Administrator, Corporate

Secretary, auditor, third party valuation agent,

brokers and other professional advisers).

The independence, quality and timeliness of

theirservice provision is critical to the success

ofthe Group.

The Group is currently invested in 39 Core

Portfolio Companies.

Climate change impact

The Company does not have any direct employees.

RTW Charitable Foundation

RTW Charitable Foundation was created by the

Investment Manager with the vision to work towards

a world free of ultra-rare disease. The Foundation

funds research of rare conditions that do not attract

signiﬁcant outside investment due to limited

commercial opportunity

Section 172 of the Companies Act 2006

applies directly to UK domiciled companies.

Nonetheless the AIC Code requires that the

matters set out in section 172 are reported

on by all companies, irrespective of domicile,

provided this does not conﬂict with local

company law.

Stakeholder group

In the ﬁnancial year the Group issued:

• 10 portfolio updates by way of RNS

• 12 monthly NAV announcements by way of RNS

• Fact sheets on a quarterly basis

• Annual and Interim Reports

Through its roadshows and broker outreach, the Group

has met with 75+ investors / prospective investors.

The feedback given by the service providers is used to review

the Group’s policies and procedures to ensure open lines of

communication, and operational eﬃciency.

Honesty, fairness and integrity of the management teams

oftheportfolio companies are vital to the long-term success

ofthe Group’s investments.

The Group and the Directors minimise air travel by making

maximum use of video conferencing for Company related matters.

To research grant recipients, RTW Charitable Foundation

oﬀers not only ﬁnancial support, but also guidance gleaned from

the experience of the Investment Manager in drug development

and company building.

Beyond research, RTW Charitable Foundation oﬀers support

to humanitarian causes, initiatives that raise disease awareness

and programs with direct patientimpact.

Beneﬁts of engagements

Section 172 recognises that directors are responsible for acting in a way

that they consider, in good faith, is the most likely to promote the success

of the Group for the beneﬁt of its shareholders as a whole. In doing so, they

are also required to consider the broader implications of their decisions

and operations on other key stakeholders and their impact on the wider

community and the environment. Key decisions are those that are either

material to the Group or are signiﬁcant to any of the Group’s key

stakeholders. The Group’s engagement with key stakeholders and the

key decisions that were made or approved by the Directors during the

year are described below.

Methods of engagement

Strategic Report Governance Report Financial Statements Additional Information

3938

ESG: Environmental, Social and Governance Topics

Responsible investing

The Board has directed the Group to

initiate an ESG assessment in 2023, to

planfor forecasted regulatory measures,

including the United Kingdom’s proposed

Sustainability Disclosure Requirements, and

pave the way for reporting of the Group’s

ESG considerations to shareholders.

The Group does not have direct employees or physical

oﬃce space, and most of its activities are performed by other

organisations. Therefore, the Group’s carbon footprint should

be relatively small because it does not directly contribute to

fuel combustion or any other greenhouse gas emissions.

Three of the four Directors, as well as the Administrator,

Company Secretary are all based in Guernsey where Board

meetings are held, thus reducing the environmental impact of

long commutes and ﬂights. The Group’s ESG assessment will

also address indirect impacts on ESG factors.

The Investment Manager’s operations are highly

concentrated in its primary oﬃce space located in a building

that is LEED Gold Certiﬁed based on, among other things,

thesustainability of its location, water eﬃciency, energy and

atmosphere characteristics, use of materials and resources,

indoor environmental quality, and innovation. The Investment

Manager espouses a strong culture of compliance, risk

management and ethical behaviour. It aims to always act in the

best interests of shareholders, employees and stakeholders.

Its corporate code of ethics addresses the largest areas of

risk pertaining to the alternative asset management industry,

including but not limited to conﬂicts of interest, anti-bribery,

employee investing, insider trading and political contributions.

Furthermore, it seeks to ensure that investments do not

leadto negative impacts on public health or well-being or

contribute to human or labour rights violations, corruption,

serious environmental harm or other actions which may be

perceived to be unethical. It seeks long-term investment

partners that evidence equivalent professional and ethical

rigour. The Investment Manager is wholly-owned by minority

and/or female shareholders.

Virtual meetings

held instead to

reduce air travel

Harlem Event

Responsible investing

The Board believes that acting and investing responsibly

is a necessary foundation for the long-term sustainability

ofinvestment success. The Investment Manager’s stated

mission, to power breakthrough therapies that transform

the lives of millions, is an approach to investing that is

inherently socially conscious. Its team of scientists and

researchers work tirelessly to ﬁnd treatments and potentially

cures for diseases and conditions in order to improve quality

of life across the globe. As a guiding principle, it prioritises

overall positive impact on patients and long-term meaningful

outcomes to society and believes this is the foundation

of the Group’s success.

RTW Charitable Foundation

The Investment Manager created the RTW Charitable

Foundation (“RTWCF”) with its vision to work towards a world

free of ultra-rare disease. It was founded at the intersection

ofscientiﬁc progress and humanitarian eﬀort. While working

to improve human health on a global scale is an inspiring

undertaking, the RTWCF brings hope to those with conditions

so rare that they do not attract signiﬁcant outside investment

due to the limited potential for commercial opportunity.

RTWCF’s mission is to power rare disease research, medical

innovation and humanitarian collaborations to improve the

health of underserved communities.

It is able to provide capital, manpower, and logistical support

to help scientists push projects forward. In addition, it aims to

contribute to advocacy, disease awareness and direct support

of organisations and communities in New York City.

RTWCF provides research grant recipients ﬁnancial support

as well as guidance gleaned from the Investment Manager’s

experience in drug development and company building.

NICE day of

action in Queens

Areté Afterchool

program COVID

CASE STUDY

Building education access

Areté Education designs interactive afterschool and summer

programs to teach students in the South Bronx about

leadership skills, wellness, diverse career paths, and arts

& culture.

During the pandemic, children living in temporary housing had

limited access to education when schools moved to remote

learning. With RTWCF’s support, Areté Education created the

Areté Hope Network Program to provide direct assistance to

families struggling during the pandemic.

Eighteen students and families with unstable housing

received stipends, groceries, hotspots, laptops, and

mentoring to improve children’s attendance rates and

academic performance.

Students’ engagement and attendance improved

dramatically: all students in warning groups labeled

“chronically absent” or “severely chronically absent”

movedout of those warning groups during the intervention.

Ninety-three percent of participants had attendance rates

of 80% or higher including 50% with perfect attendance

through the course of the program.

Each of our days of action have

been really inspirational and

powerful, it is a way to feel

connected. We are really hands

on, doing the work physically not

just mentally or through spirit.

We combine all of these elements

on our journey at work to make

adiﬀerence.

CASE STUDY

Improving vaccine access

In August 2021, some NYC neighbourhoods had less than

35% of residents fully vaccinated, when the city average was

roughly 55%.

The New York City Department of Health and Mental Hygiene

found that distrust in government and drug companies

created hesitancy in vaccine uptake.

We say this often — RTWCF was one of the ﬁrst to support

our recovery eﬀorts and helped pave the way to our impact

and reimagined programs. We’re excited to reach new

heights together.

New Immigrant Community Empowerment (NICE) supports

immigrant workers and their families by advocating for

workplace safety and rights, providing skills training, and

connecting families with resources. During the pandemic,

NICE expanded their services to include food access, vaccine

support, and ﬁnancial assistance. RTWCF partnered with

NICE to distribute 10,000 meal and grocery packages,

conduct comprehensive community outreach around

COVID-19 vaccination safety, and throw a Vaccine Access

Block Party. In 2021, NICE helped over 5,000 people access

COVID vaccines by translating appointment registration

documents, educating people on the vaccine, and

accompanying people to appointments.

Strategic Report Governance Report Financial Statements Additional Information

4140

02 // GOVERNANCE

44 Biographies of Directors

46 Report of the Directors

49 Corporate Governance Report

54 Statement of Directors’ Responsibilities

55 Directors’ Remuneration Report

58 Report of the Audit Committee

Governance

Report

The Board has overall responsibility for maximising the

Company’s success by directing and supervising the

aﬀairs of the business and meeting the appropriate

interests of shareholders and relevant stakeholders,

while enhancing the value of the Company and also

ensuring the protection of investors.

Strategic Report Governance Report Financial Statements Additional Information

4342

Biographies of Directors

Paul Le Page

Independent

Non-Executive Director

William Simpson

Chairman and Independent

Non-Executive Director

Resident

Committees

Board meetings

attended

Appointed

Guernsey, British Isles

2 October 2019

Chair of the Management Engagement Committee

Member of the Audit Committee

Member of the Nomination Committee

Member of the Remuneration Committee

9/9 9/9

Guernsey, British Isles

2 October 2019

Chair of the Audit Committee

Member of the Nomination Committee

Member of the Remuneration Committee

Member of the Management Engagement Committee

Roles and

responsibilities

William Simpson is the Chairman and an independent director

based in Guernsey providing services to investment and other

ﬁnancial services companies. William has over 30 years’

experience within the ﬁnancial services industry. He

previously practiced law in the course of which he advised

onthe establishment of a wide range of investment funds

andrelated matters. William graduated in law from Leeds

University and ﬁrst qualiﬁed as an English barrister.

Williamisa member of the Guernsey Bar. William also holds

directorships at Ninety One Premier Funds PCC Limited,

Handelsbanken Alternatives Fund Limited, AHL Strategies

PCC Limited, Man AHL Diversiﬁed PCC Limited and Alpha

Real Trust Limited.

Paul Le Page is a former executive Director and Senior

Portfolio Manager of FRM Investment Management Limited,

asubsidiary of Man Group, and holds non-executive

directorships at a number of London Stock Exchange listed

investment funds. Mr. Le Page is Audit Committee Chair of

Blueﬁeld Solar Income Fund Limited and was previously Audit

Committee Chair of UK Mortgages Limited, Thames River

Multi Hedge PCC Limited and Cazenove Absolute Equity

Limited. Mr. Le Page has 19 years’ Audit Committee chair

experience within the closed end investment fund sector and

has a broad-based knowledge of the global investment industry

and product structures. Mr Le Page graduated from University

College London and later received an MBA from Heriot Watt

University. He originally qualiﬁed as a Chartered Engineer and

led the development of clinical diagnostic instrumentation and

software and robotic sample preparation equipment prior to

commencing a career in ﬁnance. In addition to Blueﬁeld Solar

Income Fund Limited his other directorships include

TwentyFour Income Fund Limited and Highbridge Tactical

Credit Fund Limited, all of which are listed on the Premium

Segment of the London Stock Exchange.

Our collective power builds

success around brilliant ideas

Stephanie Sirota

Non-Executive Director

William Scott

Independent

Non-Executive Director

9/9 9/9

Guernsey, British Isles

3 October 2019

Chair of the Nomination Committee

Chair of the Remuneration Committee

Member of the Audit Committee

Member of the Management Engagement Committee

–

Non-UK resident

2 October 2019

William Scott has served continuously as an independent

non-executive director of a number of London-listed

investment companies and funds for 20 years and has been

involved in the sector more widely for nearly four decades.

From 2003 to 2004, Mr. Scott worked as Senior Vice

President with FRM Investment Management Limited,

subsequently part of Man Group. Previously (from

1989‐2002), Mr. Scott was a portfolio manager and latterly

adirector at Rea Brothers (which became part of the Close

Brothers group in 1999 and where he was a director of Close

Bank Guernsey Limited) and before that was an Assistant

Investment Manager with the London Residuary Body

Superannuation Scheme (1987-1989). Mr. Scott graduated

inphysics from the University of Edinburgh in 1982 and is

aChartered Accountant having qualiﬁed with Arthur Young

(now EY) in 1987. Mr. Scott also holds the Securities Institute

Diploma and is a Chartered Fellow of the Chartered Institute

for Securities & Investment. He is also a Chartered Wealth

Manager. His other directorships include Axiom European

Financial Debt Fund Limited and Worsley Investors Limited,

both of which are listed on the Premium Segment of the

London Stock Exchange.

Stephanie A. Sirota, serves as a Partner and Chief Business

Oﬃcer at RTW Investments, LP. Ms. Sirota is responsible

forstrategy and oversight of the ﬁrm’s business development,

strategic partnerships, communications, and investor

relations. Her background in investment banking and expertise

in ﬁnancial markets has helped position the ﬁrm as both a

partner to life sciences companies and a steward of investors’

capital. She also manages RTW’s relationships with key

partners including banks, academic institutions, corporations,

investors, and NGOs and has led the ﬁrm’s entry into the UK

and European markets. Prior to joining the Investment

Manager, from 2006 to 2010, she served as a director at

Valhalla Capital Advisors, a macro and commodity investment

manager. From 2000 to 2003, Ms. Sirota worked in the New

York and London oﬃces of Lehman Brothers, where she

advised on various mergers & acquisitions, IPOs, and capital

market ﬁnancing transactions. She began her career on the

Fixed Income trading desk at Lehman Brothers, structuring

derivatives for municipal issuers from 1997 to 1999. Ms. Sirota

graduated with honours from Columbia University and also

received a Master’s Degree from the Columbia Graduate

School of Journalism. She serves as Co-Chairman of the

Council of the Phil at the New York Philharmonic and as

President of RTW Charitable Foundation.

Strategic Report Governance Report Financial Statements Additional Information

4544

Report of the Directors

Principal activities

Further information on the principal activities of the Group

can be found on pages 101 to 102.

Business review

A review of the Group’s business and its likely future

development is provided in the Chairman’s Statement on

pages 6 to 7. The underlying investments of the Group are

reviewed in the Investment Manager’s Report on pages 8 to 20.

Results and distributions

The results of the Group for the year are shown in the

audited statement of operations on page 78.

The Net Asset Value of the Group as at 31 December 2022

was US$347.9 million (2021: US$387.4 million).

For the year ended 31 December 2022, the Group recorded

anet total return based on NAV per share of -10.2 per cent

(2021: -12.8 per cent).

No dividends or distributions were paid during the years

ended 31 December 2022 and 31 December 2021. The

Company does not anticipate paying any dividends on its

Ordinary Shares, as it intends to re-invest proceeds received

from Portfolio Company sales or distributions. There have

been no changes in the Company’s dividend policy from that

disclosed in the Prospectus published by the Company on

14October 2019.

Change of status for US federal tax purposes

from PTP to a corporation

On 1 December 2022 the Company changed its status for U.S.

federal tax purposes from a “publicly traded partnership” or

“PTP” to a corporation. The change in status caused it to be

treated as a “passive foreign investment company” or a “PFIC.”

This change was necessitated by recent changes to U.S. tax

legislation that came into eﬀect on 1 January 2023. Under this

new legislation, custodians holding shares in companies

treated as publicly traded partnerships would incur new

withholding tax obligations. A number of custodians eﬀecting

transactions in the Company’s Ordinary Shares informed the

Company that, as a result of this new U.S. withholding tax

obligation, they would no longer hold or deal with the Ordinary

Shares if the Company continued to be treated as a publicly

traded partnership for U.S. federal income tax purposes. This

would have had a material adverse impact on the Company’s

shareholders and the functioning of the market in its shares

and consequently the Board decided to ﬁle documentation

with the U.S. Internal Revenue Service to change the

Company’s tax status to a corporation for U.S. purposes.

Related to the making of the tax election, the Company

carried out a reorganisation of the arrangements pursuant

towhich an aﬃliate of the Investment Manager is allocated

itsshare of the investment performance generated by the

Company. Pursuant to this, the Company established a new

wholly-owned subsidiary, RTW Venture Fund Operating

Limited, to which it has transferred its right to the proﬁts

and losses attributable to the Company’s portfolio of assets.

The Directors of the Subsidiary are the same as the Directors

of the Company. This reorganisation had no economic impact

on shareholders and was eﬀected solely for the purpose of

ensuring that the share of the investment performance

generated by the Company which is allocable to an aﬃliate of

the Investment Manager receives the same treatment for U.S.

federal tax purposes as would have been the case if no tax

election by the Company had been compelled by the change

inU.S. tax law.

The previous Articles of Incorporation of the Company

reﬂected the status of the Company prior to the tax election

as a PTP. Accordingly, the tax election made by the Board is

inconsistent with, and amounted to a technical breach of, the

provisions of those Articles. Consequently, a circular was

published by the Company, pursuant to which shareholders

were asked (a) to ratify the decision of the Board to make the

tax election; and (b) to approve the adoption of new Articles,

which were updated to reﬂect the U.S. federal tax status of

the Company following completion of the tax election and the

reorganisation. At an Extraordinary General Meeting of the

Company held on 19 December 2022, Shareholders approved

resolutions to approve the Company’s change of Articles of

Incorporation and the change to the Company’s tax status,

with eﬀect from 1 December 2022.

As part of the reorganisation, the Investment Management

Agreement was amended to provide services to the Subsidiary.

There was no change to the investment management fee, but

the Performance Allocation Share held by RTW Venture

Performance LP was surrendered in exchange for a New

Performance Allocation Share issued by the Subsidiary. The

New Performance Allocation Share issued by the Subsidiary

has identical terms to the original Performance Allocation

Share issued by the Company (see Note 9).

Capital Structure

The Company is an authorised closed-ended Guernsey

investment company with registered number 66847. The

Company’s Ordinary Shares are listed on the Oﬃcial List

ofthe FCA and to trading on the Premium Segment of the

London Stock Exchange plc’s Main Market under the ticker

symbols RTW (USD quote) and RTWG (GBP quote).

The Board believes the Premium Segment of the Main Market

is the most appropriate platform for the continued growth of

the Group by increasing RTW Venture Fund’s proﬁle,

broadening its shareholder register, adding Sterling

denomination, and facilitating the Group’s eligibility for

inclusion in the FTSE UK Index Series.

As at 31 December 2022, the Company’s issued share capital

was 212,389,138 Ordinary Shares (2021: 212,389,138 Ordinary

Shares and 1 Performance Allocation Share). There are no

shares held in treasury.

More on results

for the year

page 67

Section 172

page 38

Chairman's

Statement

page 06

Investment

Manager’s report

page 08

Directors’ dealings in shares

The Company has adopted a share dealing code for the Board

and will seek to ensure compliance by the Board with the

terms of the share dealing code. The share dealing code is

compliant with the UK Market Abuse Regulation.

Relations with shareholders

The Board welcomes shareholders’ views and places great

importance on communication with its shareholders. The

Company’s Annual General Meeting provides a forum for

shareholders to meet and discuss issues with the Directors

ofthe Company. The Chairman and other Directors are also

available to meet with shareholders at other times, if

required. In addition, the Company maintains a website which

contains comprehensive information (www.rtwfunds.com/

venture-fund), including company notiﬁcations, share

information, ﬁnancial reports, monthly NAVs, investment

objectives and policy, investor contacts and information on

the Board and corporate governance.

Further information on relations with shareholders and other

stakeholders can be found in Engaging with Stakeholders

(Section 172) on pages 38 to 39.

Annual General Meeting

The Annual General Meeting (“AGM”) of the Company will be

held on 21 June 2023 at 1

Floor, Royal Chambers, St Julian’s

Avenue, St Peter Port, Guernsey GY1 3JX. Details of the

resolutions to be proposed at the AGM, together with

explanations, appear in the Notices of Meetings which are

being sent to shareholders in due course.

Members of the Board, including the Chairman and the Audit

Committee Chairman, will be in attendance at the AGM and

will be available to answer shareholder questions.

Shareholdings of the Directors

Directors’ shareholdings in the Company are disclosed in the

Directors’ Remuneration Report.

Directors’ appointment, tenure and

re-election, and Directors’ remuneration

Directors’ appointment, tenure and re-election and

Directors’remuneration are disclosed in the Directors’

Remuneration Report.

The Directors hereby submit the annual report and audited

consolidated ﬁnancial statements for the Group for the

year ended 31December 2022.

Further issues of shares will only be made if the Directors

determine such issues to be in the best interests of

shareholders and the Group as a whole. Relevant factors in

making such determination include net asset performance,

share price rating, perceived investor demand and any

regulatory restrictions. In the case of further issues of

Ordinary Shares (or sales of Ordinary Shares from treasury),

such Ordinary Shares will only be issued at prices that are not

less than the prevailing NAV per Ordinary Share announced as

of the end of the immediately preceding month in which such

Ordinary Shares are being issued.

Authority to issue shares

Subject to the Company’s Articles of Incorporation, the

Directors have the power to issue an unlimited number

ofshares.

Authority to buy back shares

The current authority of the Company to make market

purchases of up to 31,837,132 Ordinary Shares (being 14.99

per cent. of the issued Share Capital) as authorised at the

AGM of the Company on 21 June 2022. At the AGM scheduled

to take place on 21 June 2023, the Board will seek to renew

such authority. Any buy back of Ordinary Shares will be made

subject to the Companies Law and within any guidelines

established from time to time by the Board and the making

and timing of any buy backs will be at the absolute discretion

of the Board and not at the option of the shareholders.

Ordinary Shares will only be repurchased at a price which,

after repurchase costs, represents a discount to the Net

Asset Value per Ordinary Share and where the Directors

believe such purchases will enhance shareholder value. Such

purchases will also only be made in accordance with the

Listing Rules of the UK Listing Authority which provide that

the price to be paid must not be more than 5 per cent above

the average of the middle market quotations for the Ordinary

Shares for the ﬁve business days before the shares are

purchased unless previously advised to shareholders.

In accordance with the Company’s Articles and Companies

Law, up to 10 per cent. of the Company’s Ordinary Shares

may be held as treasury shares. The Company has not held

any Ordinary Shares in treasury at any time.

Major Shareholders

As at 31 December 2022 and 29 March 2023, insofar as is known to the Company, the following parties were interested, directly

or indirectly, in 5 per cent. or more of the Ordinary Shares in issue:

Shareholder

Shareholding

(Ordinary Shares) % Holding Nature of Holding

Bluestem Partners, LP 34,093,156 16.05 Direct

Roderick Wong 29,593,872 13.93 Indirect

Ducasse Group Limited 18,361,456 8.65 Direct

Details of the voting rights can be found in Note 9.

Details of voting

rights

page 96

Principal and

emerging risks

and uncertainties

page 34

Longer Term

Viability

Statement

page 37

Strategic Report Governance Report Financial Statements Additional Information

4746

Report of the Directors

continued

Articles of Incorporation

The Company’s Articles may only be amended by special

resolution of the shareholders.

Key service providers

Independent auditor

KPMG Channel Islands Limited (“KPMG”) has been appointed

to serve as the Company’s auditor. In such capacity, the

auditor is responsible for auditing and expressing an opinion

on the consolidated ﬁnancial statements of the Group in

accordance with applicable law and auditing standards.

Investment Manager

The Directors are responsible for the determination of

the Group’s investment policy and have overall responsibility

for the Group’s business activities. The Group and the

Investment Manager have entered into the Investment

Management Agreement (as amended, supplemented or

modiﬁed from time to time), pursuant to which the

Investment Manager has been appointed as the Group’s

investment manager and has been delegated the authority

and responsibility to manage the Group’s investment

portfolio. The fees payable to the Investment Manager and

the impact of the Group’s restructuring on the Investment

Management Agreement are disclosed in Note 10.

Administrator and Sub-Administrator

On 1 February 2021, Elysium Fund Management Limited

was appointed as Administrator, with responsibility for the

administration, corporate secretarial, corporate governance

and compliance services. From 1 February 2021 Morgan

Stanley Fund Services USA LLC was appointed to serve as

the Group’s Sub-Administrator.

Corporate Brokers

On 11 February 2022, Merrill Lynch International (BofA

Securities) was appointed as corporate broker and ﬁnancial

adviser to the Group. BofA Securities and J.P. Morgan

Cazenove have been appointed to act as joint brokers for

theGroup.

Change of control

There are no agreements that the Group considers

signiﬁcant and to which the Company is party that would take

eﬀect, alter or terminate upon change of control of the Group

following a takeover bid.

Principal and emerging risks and uncertainties

The Group’s assets consist of investments in promising

therapies and technologies in the pharmaceutical industry.

There is inherent uncertainty in the long-term viability of

developing biopharmaceutical technologies and whether these

technologies can translate scientiﬁc theory into commercially

viable business opportunities. Its principal and emerging risks

are therefore related to the particular circumstances of the

businesses in which it is invested. The Group seeks to

mitigate these risks through active asset management

initiatives and carrying out due diligence work on potential

targets before entering into any investments.

Each Director is aware of the risks inherent in the Group’s

business and understands the importance of identifying,

evaluating and monitoring these risks. The Board has adopted

procedures and controls that enable it to manage these risks

within acceptable limits and to meet all of its legal and

regulatory obligations.

The Board considers the process for identifying, evaluating

and managing any signiﬁcant risks faced by the Group on an

on-going basis and these risks are reported and discussed at

Board meetings. It ensures that eﬀective controls are in place

to mitigate these risks and that a satisfactory compliance

regime exists to ensure all applicable local and international

laws and regulations are upheld. Particular attention has been

given to the eﬀectiveness of controls to monitor liquidity risk,

asset values and counterparty exposure.

For each material risk, the likelihood and consequences are

identiﬁed, management controls and frequency of monitoring

are conﬁrmed and results reported and discussed at the

quarterly Board meetings and through updating of the

Group’s risk matrix. An extraction of the highest rated risks

post mitigation forms the basis of the Principal and Emerging

Risks and Uncertainties disclosure in the Strategic Report on

pages 34 to 36.

The ﬁnancial risks of the Group are discussed in Note 8 to the

consolidated ﬁnancial statements.

The Group’s other risk factors are fully discussed in the

Company’s prospectus, available on the Group’s website

(www.rtwfunds.com/venture-fund) and should be reviewed

byshareholders.

Going concern

In forming a view on whether the Company is a going concern,

the Directors have considered the following factors:

• A three-year stressed cash-ﬂow forecast prepared by the

Investment Manager for the purposes of assessing viability;

• A viability and going concern memorandum from the

Investment Manager on the Company’s business model and

operations (please see the Longer Term Viability

Statement on page 37);

• The Group’s ability to access liquidity from liquid

investments and to raise additional capital both during and

after the current ﬁnancial year-end.

After making enquiries and given the nature of the Group and

its investments, the Directors are satisﬁed that it is appropriate

to continue to adopt the going concern basis in preparing the

consolidated ﬁnancial statements, and, after due consideration,

the Directors consider that the Company is able to continue for

the foreseeable future.

On behalf of the Board

William Simpson

Chairman

30 March 2023

Corporate Governance

Report

The Board recognises the value of sound corporate governance

and, in particular, has regard to the requirements of the UK

Code (available from the FRC’s website, www.frc.org.uk).

The Company is a registered closed-ended investment

scheme pursuant to the POI Law and the Registered

Collective Investment Schemes Rules 2021 issued by the

GFSC. The GFSC Code applies to all companies that hold a

licence from the GFSC under the regulatory laws or which are

registered or authorised as Collective Investment Schemes,

which includes the Company. The GFSC has stated in the

GFSC Code that companies which report against the UK

Code or the AIC Code are deemed to meet the GFSC code,

and need take no further action.

The Company’s prospectus dated 14 October 2019 stated

that the Company will be in compliance with the UK Code.

The Company is a member of the AIC and the Board of the

Company has accordingly considered, and resolved to follow,

the principles and recommendations of the AIC Code

(available from the AIC’s website, www.theaic.co.uk).

The AIC Code addresses all the principles set out in the

UK Code, as well as setting out additional principles and

recommendations on issues that are of speciﬁc relevance

to investment companies such as the Company. The Board

considers that reporting against the principles and

recommendations of the AIC Code (which incorporates the

UK Code) provides better information to shareholders whilst

meeting the requirements of the GFSC Code.

For the reasons set out in the preamble to the UK Code, the

Board considers certain of these provisions are not relevant to

the position of the Group as an externally managed investment

group. In particular, all of the Group’s day-to-day management

and administrative functions are outsourced to third parties.

As a result, the Group has no chief executive or any executive

directors, employees or internal operations and has therefore

not reported further in respect of these provisions.

The Directors recognise the value of the AIC Code and have

taken appropriate measures to ensure that the Group has

complied and continues to comply, as far as possible given

the Group’s size and nature of the business, with the AIC

Code, except as set out below:

Senior Independent Director - Provision 14 of the AIC Code

states a Board should consider appointing one independent

non-executive Director to be the Senior Independent

Director. Having taken into account its small size and that

the Chairman and two of the other three Directors are each

similarly independent and non-executive, the Board considers

it unnecessary to appoint such a Senior Independent Director.

All members of the Board are available to shareholders if they

have unresolved concerns.

The Board is aware of the Hampton-Alexander Review

target to have 33% of FTSE board positions held by women

by 2020 and notes that it currently only achieves 25% female

representation. The future growth of the Board will be linked

to the growth of the Group’s shareholder base as the Board is

mindful of the need to manage the Group’s ﬁxed costs whilst

it is relatively small. Both gender and ethnic diversity factors

will be considered by the Board when making any new

appointments or replacing current Board members.

The Board and its Committees

The Board monitors developments in corporate governance

to ensure the Board remains aligned with best practices,

especially with respect to the increased focus on diversity

(see the Directors’ Remuneration Report).

The Directors of the Company at the date of this report are

William Simpson (Chairman and Chair of the Management

Engagement Committee), Paul Le Page (Chair of Audit

Committee), William Scott (Chair of the Nomination and

Remuneration Committee) and Stephanie Sirota. The Board

believes the current Board members have the appropriate

qualiﬁcations, experience and expertise to manage the Group.

The Director’s biographies can be found on pages 44 to 45.

The Board meets at least on a quarterly basis. The dates

for each scheduled meeting are planned at the beginning

of the year and conﬁrmed in writing in accordance with the

Company’s Articles of Incorporation. Meetings for urgent

issues may be and are convened at short notice if all Directors

are informed. In addition to formal Board and/or committee

meetings and, to the extent practicable and appropriate,

the Directors maintain close contact with each other, the

Investment Manager and the Administrator, by email and

conference calls, for the purpose of keeping themselves

informed about the Group’s activities. The Board requires

information to be supplied in a timely manner by the

Administrator and other advisors in a form and of a quality

appropriate to enable it to discharge its duties.

The Board has delegated certain responsibilities to its

Audit Committee, Management Engagement Committee

and Nomination and Remuneration Committee (together the

“Committees”). Given the size and nature of the Board it is

felt appropriate that all independent Directors are members

of the Committees.

The roles and responsibilities of the Committees are set out

in the terms of reference and are summarised on page 50.

Biographies

ofDirectors

page 44

Strategic Report Governance Report Financial Statements Additional Information

4948

Corporate Governance Report

continued

Nomination and Remuneration Committee

The Nomination and Remuneration Committee is chaired by

William Scott. The committee currently consists of William

Scott, William Simpson and Paul Le Page. The Nomination

andRemuneration Committee meets at least once a year

pursuant to its terms of reference, which are available on

theCompany’s website www.rtwfunds.com/venture-fund.

Further information of the Nomination and Remuneration

Committee, Board diversity and Directors’ remuneration are

provided in the Directors’ Remuneration Report on pages 55

to 57.

Board performance and evaluation

In accordance with Provision 26 of the AIC Code, the Board is

required to undertake a formal and rigorous evaluation of its

performance on an annual basis. Such an evaluation of the

performance of the Board as a whole and the Chairman is

carried out under the mandate of the Board in the form of

self-appraisal questionnaires and a detailed discussion to

determine eﬀectiveness and performance in various areas as

well as the Directors’ continued independence.

The performance and eﬀectiveness of the Directors is

assessed annually having regard to the speciﬁc responsibilities

of each Director as described in their service agreements.

To date, the Board has not engaged in the use of an external

facilitator. The Directors believe that the current mix of skills,

experience, ages and length of service of the Directors is

appropriate to the requirements of the Group. With any new

Director appointment to the Board, induction training will

beprovided.

Directors’ conﬂicts of interest

All of the Directors are non-executive. William Simpson and

William Scott are directors of a number of funds managed by

members of the Man group of companies. Paul Le Page was

employed by Man Group until 31 December 2019 and was a

director of the investment managers of those funds. None

ofthe Directors were responsible for the appointment of

theothers, the decision in respect of which was made by

anindependent party. Having considered the information

disclosed above, the Board have concluded that William

Simpson, Paul Le Page, and William Scott remain independent

under provision 10 of the AIC Code. The Board considers

Messrs Simpson, Le Page and Scott as independent of

eachother and free from any business or other relationship

that could materially interfere with the exercise of their

independent judgment. The Board when taken as a whole is

independent of the Investment Manager. Ms Sirota is a Board

representative of the Investment Manager and is therefore

not considered independent.

Items are discussed and, as appropriate, matters are

endorsed, approved or recommended to the Board by

theCommittees. The chairman of each of the Committees

provides the Board with a summary of the main discussion

points at the Committee meetings and any decisions made

bythe Committee along with any recommendations which

require Board approval.

The Board may also delegate certain functions to other

parties; in particular the Directors may delegate to the

Investment Manager. However, the Directors retain

responsibility for exercising overall control and supervision

ofthe Investment Manager. Matters reserved for the Board

include, amongst others, approval and oversight of the

Group’s investment activities by ensuring that the Group has

complied with its investment restrictions. The Board also

reviews the performance of the Group against its target

return (as deﬁned in the Prospectus) and, in light of the

current market conditions, considers the strategy taken by

the Investment Manager. Approval of the Annual and Interim

Reports, announcements, and dividends are also reserved for

the Board.

Audit Committee

The Audit Committee is chaired by Paul Le Page with formally

delegated duties and responsibilities within written terms

ofreference, which are available on the Company’s website

www.rtwfunds.com/venture-fund. Further information on

theAudit Committee isincluded in the Report of the Audit

Committee on pages58to 61.

Management Engagement Committee

The Management Engagement Committee is chaired by

William Simpson. The committee currently consists of William

Simpson, William Scott and Paul Le Page. The Management

Engagement Committee meets at least once a year pursuant

to its terms of reference, which are available on the

Company’s website www.rtwfunds.com/venture-fund.

The Management Engagement Committee provides a

formalmechanism for the review of the performance of the

Company’s advisers, including the Investment Manager. It

carries out this review through consideration of a number of

objective and subjective criteria and through a review of the

terms and conditions of the advisers’ appointments with the

aim of evaluating performance, identifying any weaknesses and

ensuring value for money for the Company’s shareholders.

Directors’

Remuneration

Report

page 55

Board meeting attendance

The Board meets at least four times a year, with further ad hoc Board and Board Committee meetings as required. Between

meetings, there is regular contact with the Secretary and the Company’s Brokers, as necessary.

The attendance record of the Directors for the year is set out below:

Director

Scheduled

Board Meetings

(1)

Audit

Committee Meetings

Management

Engagement

Committee Meetings

Nomination and

Remuneration

Committee Meetings

William Simpson 9/9 5/5 1/1 1/1

Paul Le Page 9/9 5/5 1/1 1/1

William Scott 9/9 5/5 1/1 1/1

Stephanie Sirota

(2)

9/9 n/a n/a n/a

(1) One ad hoc Board meeting that was held in the year has not been included in this total.

(2) Ms Sirota is not a member of the Audit Committee, Management Engagement Committee or Nomination and Remuneration Committee,

however from time to time she is invited to attend and did so at all such meetings held during the year.

The Chairman of the Board must be independent and is

appointed in accordance with the Company’s Articles of

Incorporation. Mr Simpson’s independence is evaluated

annually and he is considered to be independent because he:

• has no direct or indirect current or historical employment

with the Investment Manager; and

• has no current directorships in any other entities (other

than the Company and Subsidiary) for which the

Investment Manager provides services.

Duties and responsibilities

The Board has overall responsibility for maximising the

Company’s success by directing and supervising the aﬀairs

ofthe business and meeting the appropriate interests of

shareholders and relevant stakeholders, while enhancing

thevalue of the Company and also ensuring the protection

ofinvestors. A summary of the Board’s responsibilities is

asfollows:

• statutory obligations and public disclosure;

• strategic matters and ﬁnancial reporting;

• risk assessment and management including reporting,

compliance, governance, monitoring and control; and

• other matters having a material eﬀect on the Company.

The Board is responsible to shareholders for the overall

management of the Group. The Board has adopted a

Schedule of Matters Reserved for the Board which sets out

the particular duties of the Board, which demonstrates the

seriousness with which it takes its ﬁduciary responsibilities.

Such reserved powers include decisions relating to the

determination of investment policy and approval of changes

instrategy, capital structure, statutory obligations and

publicdisclosure, and entering into any material contracts

bythe Group.

The Directors have access to the advice and services of the

Administrator, which is responsible to the Board for ensuring

that Board procedures are followed and that it complies with

the Companies Law and applicable rules and regulations of

the GFSC and the LSE. Where necessary, in carrying out their

duties, the Directors may seek independent legal or other

professional advice and services at the expense of the Group.

As a result of the use of professional service providers and

the nature of the Group’s operations, the Group does not

have any employees.

The Group maintains appropriate Directors’ and Oﬃcers’

liability insurance in respect of legal action against its Directors.

The Board’s responsibilities for the Annual Report are set out

in the Directors’ Responsibilities Statement on page 54. The

Board is also responsible for issuing appropriate Interim

Reports and other price-sensitive public reports.

The primary focus at Board meetings is to review the Group

strategy, investment performance and associated matters

such as share price discount/premium, investor relations,

peer group information, gearing and industry issues and to

consider recommendations from the Audit Committee and

other committees of the Board, as appropriate.

Biographies

ofDirectors

page 44

Directors’

Responsibilities

Statement

page 54

Strategic Report Governance Report Financial Statements Additional Information

5150

Report of the

Audit Committee

page 58

Corporate Governance Report

continued

Listing requirements

Following Initial admission to the SFS on 30 October

2019 and subsequent admission to trading on the Premium

Segment ofthe London Stock Exchange, the Company

became subject to the Prospectus Rules, the Disclosure

Guidance and Transparency Rules (as implemented in the UK

through theFinancial Services and Markets Act 2000 of the

United Kingdom, as amended), the Market Abuse Regulation

and theadmission and disclosure standards of the London

StockExchange.

Since admission to the SFS and subsequent admission

to trading on the Premium Segment of the London Stock

Exchange, the Company has complied with the applicable

Listing Rules.

Common Reporting Standard

and Tax Reporting Requirements

The Common Reporting Standard, formerly the Standard

for Automatic Exchange of Financial Account Information,

became eﬀective on 1 January 2016. CRS is an information

standard for the automatic exchange of information

developed by the Organisation for Economic Co-operation

and Development. CRS is a measure to counter tax evasion

and it builds upon other information sharing legislation, such

as FATCA, the UK-Guernsey Intergovernmental Agreement

for the Automatic Exchange of Information, and the European

Union Savings Directive. Under the UK-Guernsey IGA, certain

disclosure requirements may be imposed in respect of certain

shareholders in the Group who are, or are entities that are

controlled by one or more, residents of the United Kingdom.

In addition, under FATCA, the Group is required to make

certain disclosures and reports to further compliance with

the legislation’s requirements. It is the Group’s policy to

comply with applicable requirements under CRS, the

UK-Guernsey IGA and FATCA.

AIFMD

The Directors have considered the impact of AIFMD on the

Group and its operations. The Company is a non-EU domiciled

Alternative Investment Fund and the Investment Manager has

been appointed as the Group’s non-EU AIFM. As the Group is

managed by a non-EU AIFM, only a limited number of provisions

of AIFMD apply. The Investment Manager has made the

notiﬁcations or applications and received, where relevant,

approvals for the marketing of the Ordinary Shares to

“professional investors” (as deﬁned in AIFMD) in the

UnitedKingdom.

Internal control and ﬁnancial reporting

The Directors acknowledge that they are responsible for

establishing and maintaining the Company’s system of

internal control and reviewing its eﬀectiveness. Internal

control systems are designed to manage rather than

eliminate the failure to achieve business objectives and can

only provide reasonable but not absolute assurance against

material misstatements or loss. The Directors review all

controls including operations, compliance and risk

management. The key procedures which have been

established to provide internal control are:

• The Board monitors the actions of the Group and

undertakings of any external consultant as appointed by

the Group at regular Board meetings and is given frequent

updates on developments arising from the operations and

strategic direction of the underlying investee companies.

The Board has also delegated administration and company

secretarial services to the Administrator; however, it

retains accountability for all functions it delegates.

• The Board clearly deﬁnes the duties and responsibilities

of the Group’s agents and advisers and appointments are

made by the Board after due and careful consideration.

The Board monitors the ongoing performance of such

agents and advisers and will continue to do so.

• The Administrator maintains a system of internal

control on which they report to the Board. The Board has

reviewed the need for an internal audit function and has

decided that the systems and procedures employed by the

Administrator provide the assurance that a sound system

of risk management and internal control should, which

safeguards shareholders’ investment and the Group’s

assets. An internal audit function speciﬁc to the Group

is therefore considered unnecessary.

The systems of control referred to above are designed to

ensure eﬀectiveness and eﬃcient operation, internal control

and compliance with laws and regulations. In establishing the

systems of internal control, regard is given to the materiality

of relevant risks, the likelihood of costs being incurred and

costs of control.

The need for an internal audit function is discussed in the

Report of the Audit Committee.

The UK Modern Slavery Act

The Board conducts the business of the Group ethically

andwith integrity, and has a zero-tolerance policy towards

modern slavery in all its forms. As the Group has no

employees, all of its Directors are non-executive and all its

functions are outsourced, there are no further disclosures

tobe made in respect of employees and human rights. The

Board notes that the companies in which the Group invests

directly or indirectly may have employee, community, human

rights or social impacts of which the Board has no visibility

orcontrol.

Litigation

So far as the Directors are aware, no litigation or claim

ofmaterial importance is pending or threatened against

theGroup.

On behalf of the Board

William Simpson

Chairman

30 March 2023

Anti-Bribery and Corruption Policy

The Board has a zero-tolerance approach to instances of

bribery and corruption and has reiterated its commitment

to carry out business fairly, honestly and openly. Accordingly,

it expressly prohibits any Director or associated persons,

when acting on behalf of the Group, from accepting, soliciting,

paying, oﬀering or promising to pay or authorise any payment,

public or private, in the United Kingdom or abroad to secure

any improper beneﬁt for themselves or for the Group.

The Investment Manager has also adopted a zero-tolerance

approach to instances of bribery and corruption. The Board

insists on strict observance with these same standards by

its service providers in their activities for the Group.

Criminal Finances Act

The Board has a zero-tolerance commitment to preventing

persons associated with it from engaging in criminal

facilitation of tax evasion. The Board expects the same of its

service providers and will not work with service providers

that it knows do not demonstrate the same zero-tolerance

commitment to preventing persons associated with it from

engaging in criminal facilitation of tax evasion.

Environment, Employees, Human Rights

and Social Matters

The Group has an investment management contract with the

Investment Manager. The Group has no employees and all of

its Directors are non-executive, with day-to-day activities

being carried out by third party service providers. There

are therefore no disclosures to be made in respect of its

employees. Further, because the Group is a closed-ended

investment group with no employees, its environmental

impact is minimal. The Board notes that the companies in

which the Group invests directly or indirectly may have an

environmental, employee, human rights or social impact of

which the Board has no visibility or control.

Strategic Report Governance Report Financial Statements Additional Information

5352

Statement of Directors’ Responsibilities

Statement of Directors’

Responsibilities

The Directors are responsible for preparing the Annual

Report and consolidated ﬁnancial statements in accordance

with applicable law and regulations.

The Companies Law requires the Directors to prepare

ﬁnancial statements for each ﬁnancial year. Under that law,

the Directors have elected to prepare the consolidated

ﬁnancial statements in accordance with accounting principles

generally accepted in the United States of America and

applicable law.

Under the Companies Law, the Directors must not approve

the ﬁnancial statements unless they are satisﬁed that they

give a true and fair view of the state of aﬀairs of the Group

and of its proﬁt or loss for that period. In preparing these

consolidated ﬁnancial statements, the Directors are

requiredto:

• Select suitable accounting policies and then apply them

consistently;

• Make judgements and estimates that are reasonable,

relevant and reliable;

• State whether applicable accounting standards have been

followed, subject to any material departures disclosed and

explained in the consolidated ﬁnancial statements;

• Assess the Group’s and the Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern; and

• Use the going concern basis of accounting unless

liquidation is imminent.

The Directors conﬁrm that they have complied with

theaboverequirements in preparing the consolidated

ﬁnancial statements.

The Directors are responsible for keeping proper accounting

records that are suﬃcient to show and explain the Group’s

transactions and disclose with reasonable accuracy at any

time the ﬁnancial position of the Company and of the Group

and enable them to ensure that its ﬁnancial statements

comply with the Companies (Guernsey) Law, 2008. They are

responsible for such internal control as they determine is

necessary to enable the preparation of ﬁnancial statements

that are free from material misstatement, whether due to

fraud or error, and have general responsibility for taking such

steps as are reasonably open to them to safeguard the assets

of the Company and of the Group and to prevent and detect

fraud and other irregularities.

The Directors are responsible for the maintenance and

integrity of the corporate and ﬁnancial information included

on the Company’s website (www.rtwfunds.com/venture-fund).

Legislation in Guernsey governing the preparation and

dissemination of ﬁnancial statements may diﬀer from

legislation in other jurisdictions.

Responsibility Statement

The Directors who hold oﬃce at the date of approval of this

Director’s Report conﬁrm that so far as they are aware, there

is no relevant audit information of which the Group’s auditor

is unaware, and that each Director has taken all the steps he

ought to have taken as a director to make himself or herself

aware of any relevant audit information and to establish that

the Group’s auditor is aware of that information.

We conﬁrm that to the best of our knowledge:

• the consolidated ﬁnancial statements, prepared in

accordance with US GAAP, give a true and fair view of

theassets, liabilities, ﬁnancial position and proﬁt or loss

ofthe Group;

• the Strategic Report contained in the Annual Report

includes a fair review of the development and performance

of the business and the position of the Group together

with a description of the principal risks and uncertainties

that they face;

• the Annual Report and audited consolidated ﬁnancial

statements, taken as a whole, are fair, balanced and

understandable and provide the information necessary for

shareholders to assess the Group’s performance, position,

business model and strategy; and

• the Annual Report and audited consolidated ﬁnancial

statements includes information required by the FCA for

the purpose of ensuring that the Group complies with the

provisions of the Listing Rules and the Disclosure Guidance

and Transparency Rules of the FCA.

The responsibility statement was approved by the Board

ofDirectors on 30 March 2023 and was signed on behalf

ofthe Board.

On behalf of the Board

William Simpson Paul Le Page

Chairman Director

30 March 2023 30 March 2023

Directors’ Remuneration

Report

The Nomination and Remuneration Committee has been

established to consider the appointment and reappointment of

Directors and ensure that the Company maintains fair and

appropriate remuneration policies and controls. The Nomination

and Remuneration Committee comprises all the independent

Directors of the Company and is chaired by William Scott.

The Company is not required to present a Directors’

Remuneration Report, and whilst this report does not

purportto meet all of the requirements of a typical listed

UKcompany’s Directors’ Remuneration Report, it has been

provided as the Directors believe that it may be useful to users

of this annual report and consolidated ﬁnancial statements.

The Group has no employees and hence no executive

directors. Directors do not have service contracts, but are

appointed under letters of appointment, copies of which are

available upon request from the Company Secretary and will

be available for inspection at the AGM.

Regarding nomination, the Nomination and Remuneration

Committee’s remit is to review regularly the structure, size

and composition of the Board, to give full consideration to

succession planning for Directors, to keep under review the

leadership needs of the Group and be responsible for

identifying and nominating for the approval of the Board

candidates to ﬁll Board vacancies as and when they arise.

Board diversity

No speciﬁc diversity parameters have been set as the Board

believes that all appointments should be made on merit and

taken in the context of skills, knowledge and experience

required for an eﬀective Board. However, it is the Group’s

policy to give careful consideration to issues of Board balance

and diversity when making new appointments.

The Board believes the current Board members have the

appropriate qualiﬁcations, experience and expertise to manage

the Group. The Director’s biographies can be found on pages

44 and 45.

Tenure policy

Each Director retires at each AGM subsequent to his or her

appointment and is eligible for re-election by the shareholders

at such AGM.

A Director who retires at an AGM may, if willing to continue to

act, be elected or re-elected at that meeting. If, at a general

meeting at which a Director retires, the shareholders neither

re-elect that Director nor appoint another person to the

Board in their place, the retiring Director shall, if willing to

act, be deemed to have been re-elected unless at the general

meeting it is resolved not to ﬁll the vacancy or unless a

resolution for the re-election of the Director is put to the

meeting and not passed.

In accordance with the AIC Code, if and when any Director has

been in oﬃce (or upon re-election would at the end of that

term, be in oﬃce) for more than nine years, or in the case of

the Chairman ten years, the Company will consider whether

there is a risk that such Director might reasonably be deemed

to have lost independence through such long service.

The Chairman, Mr Le Page and Ms Sirota have been members

of the Board since their appointment on 2 October 2019. Mr

Scott was appointed on 3 October 2019.

Termination policy

Should a Director not be re-elected by shareholders, or

retires from oﬃce under the Articles of Incorporation, the

appointment shall be terminated with immediate eﬀect and

without compensation.

A Director may resign at any time by notice in writing to the

Board in accordance with the Articles of Incorporation.

The Company may terminate a Director’s appointment with

immediate eﬀect should the Director have:

• Committed any serious breach or (after warning in writing)

any repeated or continued material breach of their

obligations to the Group; or

• Been guilty of any act of dishonesty, fraud or serious

misconduct or any conduct which (in the reasonable

opinion of the Board) tends to bring the Director or Group

into disrepute.

Succession policy

The Board gives full consideration to succession planning,

including the succession of the Chairman and Directors in the

course of its work, taking into account the challenges and

opportunities facing the Group, and what skills and expertise

are therefore needed on the Board in the future.

Biographies

of Directors

page 44

Strategic Report Governance Report Financial Statements Additional Information

5554

Directors’ Remuneration Report

continued

ensure that the Group maintains the ability to pay competitive

fees and attract and retain high calibre Directors. The increase

also provides appropriate headroom to accommodate any future

market-based adjustments to Directors’ fees and increases to

the size and composition of the Board. The Board does not

expect to utilise the full amount of the proposed Fee Cap in the

short to medium term and there is no intention to adjust the

remuneration of existing Board members except where future

reviews identify a material change of duties, or benchmarking

against comparable investment companies indicates that such

changes are appropriate to remain in line with market levels.

In setting the level of each non-executive Director’s fee, the

Board had regard to: the time commitments expected; the

level of skill and experience of each Director; and the current

market and levels of companies of similar size and complexity.

Following this evaluation, the Board determined that the fees

set out in this remuneration policy were appropriate.

Under the terms of their appointments as non-executive

Directors, the Directors are entitled to the following

annualfees:

William Simpson GBP 50,000

Paul Le Page GBP 40,000

William Scott GBP 35,000

Stephanie Sirota US$42,000

All of the Directors are also entitled to be paid all reasonable

expenses properly incurred by them in attending general

meetings, Board or committee meetings or otherwise in

connection with the performance of their duties. The Board

may determine that additional remuneration may be paid,

from time to time, to any one or more Directors in the event

such Director or Directors are requested by the Board to

perform extra or special services on behalf of the Group.

The Directors do not participate in any discussions relating

to their own fee, which is determined by the other Directors.

The Group does not pay any remuneration to the Directors

for loss of oﬃce.

On termination of the appointment, Directors shall only

be entitled to such fees as may have accrued to the date

of termination, together with reimbursement in the normal

way of any expenses properly incurred prior to that date.

Overboarding policy

To ensure that each Director has suﬃcient time to meet

their responsibilities to the Group, the Board has adopted an

overboarding policy which outlines its expectations regarding

the time commitments of the Directors.

Should a Director wish to take on an additional external

directorship of a London listed, or equivalent, company,

or is anticipating a signiﬁcant increase in time commitment

of an existing appointment, details must be provided to the

Chairman (or, if the Chairman is taking on the external

directorship, the Chairman of the Audit Committee) for

approval prior to accepting the external directorship or

additional time commitment.

The Director should:

• Conﬁrm that the external directorship or change

in time commitment is not in conﬂict with the Group;

• Provide an estimate of the time commitment required;

• Conﬁrm that they have suﬃcient surplus capacity to

meet their commitments to the Group; and

• Conﬁrm that no commercial conﬂict of interest is likely

to arise or be perceived to arise.

To assist in the Chairman’s decision, on an ongoing basis,

at each Board meeting, the Directors disclose their other

directorships at each quarterly meeting of the Company.

Remuneration policy

The Directors shall be remunerated at such a rate as the

Directors shall determine provided that the aggregate amount

of such fees shall not exceed US$500,000 per annum. At the

Company’s AGM held on 21 June 2022, in accordance with

Article 28.1.1 of the Company’s Articles, shareholders approved

to increase the total aggregate amount of Directors’ fees that

may be paid in any ﬁnancial year (“Fee Cap”) by US$200,000,

from US$300,000 to US$500,000 (or the applicable currency

equivalent thereof). The increase in the Fee Cap took eﬀect from

the date of the AGM. The previous Fee Cap of US$300,000 was

approved by shareholders at the time of the IPO of the Company

and its listing on the SFS in October 2019. The Company has

subsequently moved the listing of its shares to the Premium

Segment of the Oﬃcial List. The Board is conscious that it needs

to ensure that it has the right skills and experience appointed to

the Board to best support the Group’s growth and its strategic

plans and priorities over coming years. Accordingly, the Board

sought to increase the Fee Cap to US$500,000 in order to

Annual report on remuneration

Service contracts obligations and payment on loss of oﬃce

No Director has a service contract with the Group and, as such, no Director is entitled to compensation payments upon

termination of their appointment or loss of oﬃce.

Total remuneration paid to each Director

During the year ended 31 December 2022 the US Dollar equivalent of Directors’ remuneration that was paid was as follows:

31 December 2022

(US$)

31 December 2021

(US$)

William Simpson 53,889 68,941

Paul Le Page 43,111 55,153

William Scott 37,722 48,259

Stephanie Sirota 42,000 42,000

Total 176,722 214,353

All of the above remuneration relates to ﬁxed annual fees. The remuneration of each of the Directors other than Ms Sirota is

ﬁxed in Pounds Sterling (as set out in the ﬁrst table on the previous page) and the US Dollar equivalent set out above may vary

in accordance with ﬂuctuations in the Pounds Sterling/US Dollar exchange rate.

Directors are not eligible for bonuses, share options or long-term incentive schemes or other performance-related beneﬁts.

There are no pension arrangements in place for the Directors of the Company. Accordingly, there were no other items in the

nature of remuneration, pension entitlements or incentive scheme arrangements which were paid or accrued to the Directors

during the year.

Directors’ shareholdings in the Company

Directors of the Company and their beneﬁcial interests in the Company as at 31 December 2022 are detailed below:

Director

Number of Shares

% Holding

31 December 2022

% Holding

31 December 202131 December 2022 31 December 2021

William Simpson 200,000 150,000 0.09 0.07

Paul Le Page 128,000 103,000 0.06 0.05

William Scott 305,003 150,000 0.14 0.07

Stephanie Sirota 1,010,000 1,000,000 0.48 0.47

On behalf of the Board

William Scott

Chairman of the Nomination and Remuneration Committee

30 March 2023

Strategic Report Governance Report Financial Statements Additional Information

5756

Report of the Audit Committee

Report of the

Audit Committee

Composition

The Audit Committee, chaired by Paul Le Page, operates

within clearly deﬁned terms of reference which include all

matters indicated by DTR 7.1 and the AIC Code. Its other

members are William Simpson and William Scott. The

Chairman of the Group is a member of the Audit Committee

but does not chair it. His membership of the Audit Committee

is considered appropriate due to: the lack of perceived

conﬂict; the small size of the Board; and because the

Directors consider that he acts in a non-executive capacity

and continues to be independent.

Only independent Directors can serve on the Audit

Committee, and members of the Audit Committee must have

no current links with the Group’s external auditor and must

be independent of the Investment Manager. The Audit

Committee can request the attendance of the Investment

Manager, the auditors or any service provider at its meetings.

The Board has taken note of the requirement that at least

one member of the Audit Committee should have recent and

relevant ﬁnancial experience and is satisﬁed that the Audit

Committee is properly constituted in that respect, with all

members being highly experienced and, in particular one

member is a chartered accountant.

The performance of the chairman of the Audit Committee

isreviewed on an annual basis and the membership of the

Audit Committee and its terms of reference are kept under

regular review.

Paul Le Page

Independent Non-Executive Director

Chair of the Audit Committee

Member

Meetings

attended

Paul Le Page

Independent Non-Executive Director

5/5

William Simpson

Chairman and Independent

Non-Executive Director

5/5

William Scott

Independent Non-Executive Director

5/5

I present the Audit Committee’s report

for ﬁnancial year ended 31 December

2022, setting forth the Audit Committee’s

structure, duties, andactivities during

thereporting period.

Responsibilities

The Audit Committee is the formal forum through which the

external auditor reports to the Board of Directors. The

objectivity of the external auditor is reviewed by the Audit

Committee, which also reviews the terms under which the

external auditor is appointed to perform non-audit services

and the fees paid to the external auditor or their aﬃliated

ﬁrms overseas.

The main duties of the Audit Committee are:

• Giving full consideration and recommending to the Board

for approval of the contents of the Interim Report and

Annual Report and reviewing the external auditor’s report

thereon;

• Reviewing the scope, results, cost eﬀectiveness,

independence and objectivity of the external auditor;

• Reviewing the draft valuations of the Group’s investments

prepared by the Investment Manager, and making a

recommendation to the Board on the valuation of the

Group’s investments;

• Reviewing and recommending to the Board for approval of

the audit, audit related and non-audit fees payable to the

external auditor and the terms of their engagement;

• Reviewing and approving the external auditor’s plan for the

annual audit and interim review;

• Reviewing the appropriateness of the Group’s accounting

policies;

• Ensuring the standards and adequacy of the service

providers’ control systems;

• Reviewing and considering the UK Code, the AIC Code and

the FRC Guidance on Audit Committees; and

• Reviewing the risks facing the Group and monitoring the

risk matrix.

The Audit Committee is required to report its ﬁndings to the

Board, identifying any matters on which it considers that

action or improvement is needed, and make

recommendations on the steps to be taken.

The external auditor is invited to attend the Audit Committee

meetings at which the Interim Reports and Annual Reports

are considered and at which they have the opportunity to

meet with the Audit Committee without representatives of

any other service provider or consultant being present at

least once a year.

Financial reporting

The primary role of the Audit Committee in relation to

ﬁnancial reporting is to review with the Administrator,

Sub-Administrator, any external consultant as appointed by

the Investment Manager and the external auditor, the

appropriateness of the Interim Reports and Annual Reports,

concentrating on, amongst other matters:

• the quality and acceptability of accounting policies and

practices;

• the clarity of the disclosures and compliance with ﬁnancial

reporting standards and relevant ﬁnancial and governance

reporting requirements;

• material areas in which signiﬁcant judgements have been

applied or there has been discussion with both any

external consultant as appointed by the Investment

Manager and the external auditor;

• whether the Annual Report, taken as a whole, is fair,

balanced and understandable and provides the information

necessary for shareholders to assess the Group’s

performance, business model and strategy; and

• any correspondence from regulators in relation to the

Group’s ﬁnancial reporting.

To aid its review, the Audit Committee considers reports

from the Investment Manager and any external consultant as

appointed by the Investment Manager and also reports from

the external auditor on the outcomes of its interim review

and annual audit.

Meetings

The Audit Committee meets no less than twice a year in

Guernsey, at such other times as the Audit Committee

Chairman shall require, and meets the external auditor at least

once a year in Guernsey. The Audit Committee met seven

times in the year ended 31 December 2022 (2021: ﬁve times).

The matters discussed at these meetings were:

• Review of the terms of reference of the Audit Committee

to conﬁrm that they are appropriate to the business of the

Audit Committee and the current regulatory environment

in which the Group operates;

• Semi-annual reviews of the valuations of the Group’s

investments;

• Review of the accounting policies and format of the

consolidated ﬁnancial statements;

• The relationship with the external auditor;

• Discussion and approval of the fee for the external audit;

• Discussion and review of the audit plan;

• Review and consideration of viability model;

• Review of compliance with the AIC Code of Corporate

Governance;

• Review of the related party register;

• Consideration of the requirement for an internal audit function;

• Consideration of and recommendations to the Board

regarding the appointment of third-party service providers

and the adequacy of their arrangements; and

• Review of the Group’s key risks and internal controls.

Board

experiences

page 44

Directors’

responsibilities

page 54

Strategic Report Governance Report Financial Statements Additional Information

5958

Report of the Audit Committee

continued

Investment Manager and key service providers. The matrix

has also been reviewed with the Investment Manager in light

of Russia’s invasion of Ukraine and was used to form the basis

of the Company’s principal and emerging risk disclosures in

the Strategic Report on page 34.

Appointment of the external auditor

KPMG has been appointed as the statutory external auditor

of the Company since the Company re-domiciled from

Delaware to Guernsey on 2 October 2019. The Audit

Committee held meetings with KPMG before the start of the

audit to discuss formal planning and to discuss any possible

issues, along with the scope of the audit and appropriate

timetable. Informal meetings have also been held with the

Chairman of the Audit Committee in order that the Chairman

is kept up to date with the progress of the audit and formal

reporting requirement by the Audit Committee.

The objectivity of the external auditor is reviewed by the

Audit Committee, which also reviews the terms under which

the external auditor may be appointed to perform non-audit

services. The Audit Committee reviews the scope and results

of the audit, its cost eﬀectiveness and the independence and

objectivity of the external auditor, with particular regard to

any non-audit work that the external auditor may undertake

and the level of fees associated to this non-audit work. In

order to safeguard external auditor independence and

objectivity, the Audit Committee ensures that audit related,

non-audit, or advisory services provided by the external

auditor do not conﬂict with its statutory audit responsibilities.

Audit related services will generally only cover reviews of

interim ﬁnancial statements and capital raising work. Any

non-audit services conducted by the external auditor outside

of the reviews of interim ﬁnancial statements requires the

consent of the Audit Committee before being initiated.

The fees paid by the Group to KPMG during the last two

years were as follows:

2022 2021

Audit fee GBP 246,300 GBP 168,000

Review of interim ﬁnancial

statements

GBP 46,575 GBP 41,000

Other non-audit services

(1)

– GBP 62,500

Total GBP 292,875 GBP 271,500

(1) During the year ended 31 December 2021, KPMG was paid a

reporting accountant fee for its work on the migration of the

Company’s shares to the Oﬃcial List of the FCA and to trading

onthe Premium Segment of the London Stock Exchange plc’s

Main Market.

The external auditor may not undertake any work for the

Company in respect of the following matters – preparation

ofthe ﬁnancial statements, preparation of valuations used

inﬁnancial statements, provision of investment advice,

takingmanagement decisions or advocacy work in

adversarialsituations.

The Audit Committee reviews the scope and results of

the audit, its cost eﬀectiveness and the independence and

objectivity of the auditor, with particular regard to the level

ofnon-audit fees. During the year ended 31 December 2021,

Primary area of judgement

The Audit Committee determined that the key risk

of misstatement of the Group’s consolidated ﬁnancial

statements related to the valuation of investment in

securities, at fair value, in the context of the judgements

necessary to evaluate current fairvalues.

As outlined in Note 2 to the consolidated ﬁnancial

statements of the Group, the total carrying value of the

Group’s investments in securities at fair value as at 31

December 2022 was US$350.1 million (2021: US$409.2

million), of which US$85.9 million (2021: US$92.9 million)

related to private company investments. Market quotations

are available for those ﬁnancial assets that are listed and

traded and have an active market quote.

For private company investments, the value of the Group’s

investments is based on the value of the relevant underlying

investee companies as determined by the Investment

Manager. The valuation of the Group’s private and restricted

investments, the methodology used for the year end

valuation, and the constitution of the Investment Manager’s

Valuation Committee were discussed with the Investment

Manager and with the external auditor at an Audit Committee

meeting held on 26 January 2023, and the Independent Valuer,

as appointed by the Investment Manager, carries out a

valuation semi-annually on the private company investments.

The Group values investment in private investment

companies using the net asset values provided by the

administrators of the private investment companies

concerned as a practical expedient. The Group applies the

practical expedient to its private investment companies on

an investment-by-investment basis and consistently with the

Group’s entire position in a particular investment, unless it is

probable that the Group will sell a portion of an investment

at an amount diﬀerent from the NAV of the investment.

The Audit Committee has reviewed the valuation papers

prepared by the Investment Manager. The Investment

Manager conﬁrmed to the Audit Committee that the

valuation methodology had been applied consistently during

the year. After reviewing the scope and results of the work

ofthe external auditor, the Audit Committee concluded that

they had not identiﬁed any material errors or inconsistencies.

The external auditor explained the results of its audit work

onthe valuations, including its challenge of management’s

underlying projections, the economic assumptions, and prices

used. On the basis of its audit work, there were no material

adjustments proposed to those valuations as approved by

theAudit Committee.

Internal audit

The Audit Committee shall consider at least once a year

whether there is a need for an internal audit function.

Currently, the Audit Committee does not consider there to be

a need for an internal audit function, given that there are no

employees in the Group and all outsourced functions are with

parties who have their own internal controls and procedures.

The Audit Committee worked with the Administrator and the

Investment Manager to structure a risk matrix for the Group,

which considered the controls applied by the Board, the

KPMG was also engaged as reporting accountant in

connection with the Company’s migration to the Premium

Segment, which is a permissible service under the FRC Ethical

Standards for a company’s auditor to undertake. The Audit

Committee considers KPMG to be independent of the Group

and that the provision of such non-audit services is not a

threat to the objectivity and independence of the conduct

ofthe audit as appropriate safeguards are in place.

To fulﬁl its responsibility regarding the independence of

the external auditor, the Audit Committee considered:

• audit personnel in the audit plan for the current year;

• a report from the external auditor describing its

arrangements to identify, report and manage any

conﬂicts of interest; and

• the extent of non-audit services provided by the

external auditor.

To assess the eﬀectiveness of the external auditor,

the Audit Committee reviewed:

• the external auditor’s fulﬁlment of the agreed audit plan

and variations from it;

• reports highlighting the ﬁndings that arose during the

course of the audit; and

• feedback from the Investment Manager, Administrator,

Sub-Administrator, and any external consultant as

appointed by the Investment Manager in evaluating

the performance of the audit team.

The Audit Committee is satisﬁed with KPMG’s eﬀectiveness

and independence as external auditor having considered the

degree of diligence and professional scepticism demonstrated

by them. Having carried out the review described above and

having satisﬁed itself that the external auditor remains

independent and eﬀective, the Audit Committee has

recommended to the Board that KPMG be reappointed

as external auditor for the year ending 31 December 2023.

Annual Report

The Audit Committee members have each reviewed this

Annual Report and earlier drafts of it in detail, comparing its

content with their own knowledge of the Company, reporting

requirements and shareholder expectations. Formal meetings

of the Audit Committee have also reviewed the Annual Report

and its content and have received reports and explanations

from the Company’s service providers about the content

and the ﬁnancial results. The Audit Committee has concluded

that the Annual Report, taken as a whole, is fair, balanced and

understandable, and that the Board can reasonably and with

justiﬁcation make the statement of Directors’ responsibilities

on page 54.

Key activities of the Audit Committee

During the course of the year ended 31 December 2022, the

Audit Committee undertook a number of projects in addition

to its regular duties and reviewed a number of the Investment

Manager’s policies relating to issues such as portfolio liquidity

management and allocation of capacity in private investments.

The Audit Committee noted a substantial decline in the level

of corporate activity within the ﬁnancial year in the Biotech

sector which led to an increased emphasis on the use of public

market comparatives for valuing the Group’s private

investments. The Committee has been pleased to note that

this has led to more frequent adjustments in the valuations of

the Group’s private positions within the Investment Manager’s

monthly valuation committee meetings. The Committee has

also encouraged the Investment Manager’s valuation team and

the Company’s auditors to engage regularly throughout the

year so that they have early sight of changes to policies and

models as they occur.

During the year, the Audit Committee worked with the

Investment Manager to summarise the extensive and detailed

valuation reporting that it receives to ensure that the Board

remains focused on key issues as the portfolio grows. The

Committee also worked with the Investment Manager to

improve the frequency of the reporting that it receives in the

light of increased levels of market volatility. The Committee

now receives monthly reporting of both material public and

material private valuation changes within the Group’s portfolio.

The fact that the Company achieved a realised gain on the sale

of the Mavacamten Royalty from its core private portfolio to

Bristol Myers Squibb gave the Audit Committee additional

comfort that the Investment Manager adopts a reasonable

valuation policy.

Tightening ﬁnancial conditions have also led to the Committee

placing an increased emphasis on liquidity risk management

both within the Group’s underlying investments and within the

Group’s portfolio structure. The cash runway summaries for

our private portfolio highlight the fact that the vast majority

of our companies will not need to raise funding in the next 12

months, with over 75% of our core private portfolio ﬁnanced

for at least the next two years. The Audit Committee has also

considered the ability of the Group to meet future funding

requirements and notes that with only 25% of NAV invested in

core private positions that the Group has a signiﬁcant reserve

of potential dry powder at its disposal in its public portfolio.

The Committee also considered the ability of the Group to

meet capital funding requirements for its portfolio companies

as part of the viability assessment using the NBI index as a

proxy for the performance of its public portfolio. We concluded

that the Group should be suﬃciently well ﬁnanced to more

than double its allocation to private investments even if the

NBI index incurs a peak to trough loss of a similar magnitude

to that suﬀered in the technology crash at the start of the

millennium over the next three years.

In addition, to the above activities the Audit Committee

sought independent legal advice on the ﬁnancial reporting

requirements for the Company’s newly formed subsidiary and

also worked with the auditors to ensure that the Company has

a robust and fair pricing structure for the Company’s audit.

On behalf of the Audit Committee,

Paul Le Page

Chairman of the Audit Committee

30 March 2023

Strategic Report Governance Report Financial Statements Additional Information

6160

03 // CONSOLIDATED FINANCIAL STATEMENTS

63 Independent Auditor’s Report

67 Consolidated Statement of Assets

and Liabilities

68 Consolidated Condensed Schedule of

Investments

78 Consolidated Statement of Operations

79 Consolidated Statement of Changes

in Net Assets

81 Consolidated Statement of Cash Flows

82 Notes to the Consolidated Financial

Statements

Our opinion is unmodiﬁed

We have audited the consolidated ﬁnancial statements

ofRTWVenture Fund Limited (the “Company”) and its

subsidiary (together, the “Group”), which comprise the

consolidated statement of assets and liabilities including

theconsolidated condensed schedule of investments as

at31December 2022, the consolidated statements of

operations, changes in net assets and cash ﬂows for the year

then ended, and notes, comprising signiﬁcant accounting

policies and other explanatory information.

In our opinion, the accompanying

consolidated ﬁnancial statements:

• give a true and fair view of the ﬁnancial position of the

Group as at 31 December 2022, and of the Group’s ﬁnancial

performance and cash ﬂows for the year then ended;

• are prepared in accordance with U.S. generally

accepted accounting principles (“US GAAP”); and

• comply with the Companies (Guernsey) Law, 2008.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Independent Auditor’s Report to the

Members of RTW Venture Fund Limited

Consolidated

Financial

Statements

Our responsibilities are described below. We have fulﬁlled

our ethical responsibilities under, and are independent of

the Company and Group in accordance with, UK ethical

requirements including the FRC Ethical Standard as required

by the Crown Dependencies’ Audit Rules and Guidance. We

believe that the audit evidence we have obtained is a suﬃcient

and appropriate basis for our opinion.

Key audit matters: our assessment

of the risks of material misstatement

Key audit matters are those matters that, in our professional

judgement, were of most signiﬁcance in the audit of the

consolidated ﬁnancial statements and include the most

signiﬁcant assessed risks of material misstatement (whether

or not due to fraud) identiﬁed by us, including those which

had the greatest eﬀect on: the overall audit strategy; the

allocation of resources in the audit; and directing the eﬀorts

of the engagement team. These matters were addressed in

the context of our audit of the consolidated ﬁnancial

statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on these matters.

In arriving at our audit opinion above, the key audit matter

was as follows (unchanged from 2021):

The risk Our response

Valuation of

investments in

securities, at fair value

$350,125,577; (2021:

$409,179,507)

Refer to the Report of

the Audit Committee

on pages 58 to 61,

theConsolidated

Condensed Schedule

of Investments as at

31December 2022 on

pages 68 to 72, note 1

fair value signiﬁcant

accounting policies

and note 2 fair value

measurements

disclosures.

Basis:

The Group’s investment portfolio

represents the most signiﬁcant balance

on the consolidated statement of assets

and liabilities and is the principal driver of

the Group’s net asset value (2022: 101%;

2021: 106%). The investment portfolio is

composed of publicly quoted and private

unquoted life science investments

(together the “Investments”).

Publicly quoted life science investments,

representing 75.4% of the fair value of

Investments, are valued using third party

data sources.

Private unquoted life science investments,

representing 24.6% of the fair value of

Investments, are valued using recognised

valuation methodologies, including option

pricing models.

The Investment Manager utilises an

Independent Valuer to assist them in their

determination of the fair value of certain

private unquoted life science investments.

Risk:

The valuation of the Group’s Investments

is considered a signiﬁcant area of our

audit, given that it represents the

majority of the net assets of the Group.

The valuation risk of the private unquoted

life science investments incorporates

both a risk of fraud and error given the

signiﬁcance of the estimates and

judgements that are involved in the

determination of their fair value.

Our audit procedures included, but were not limited to:

Controls evaluation:

We assessed the design and implementation of the Investment Manager’s review

control in relation to the valuation of private unquoted life science investments.

Challenging managements’ Investments valuation, including

the use of our KPMG valuation specialists, as applicable:

For all Investments we assessed the appropriateness of the valuation methodology used

to estimate fair value.

Publicly quoted life science investments

For publicly quoted life science investments, we independently priced 100% by fair value

to third party data sources.

Private unquoted life science investments

For a value driven selection of the private unquoted life science investments we

performed the following procedures, as applicable:

• Obtained and read the valuation memorandums produced by the Investment Manager;

• Assessed the objectivity, capabilities and competency of the Independent Valuer. We

considered the scope of their engagement and methodology applied by the Independent

Valuer in performing their work. We obtained and assessed their ﬁndings and

considered the impact, if any, on our audit work;

• Agreed the price of investments acquired during the year to supporting documentation

such as purchase agreements, funding draw down requests and bank statements. We

performed public searches for contradictory or dis-conﬁrming evidence to challenge

both the absence or appropriateness of fair value movements since acquisition;

• For those private unquoted life science investments valued using valuation models, such

as option pricing models, with the use of our own valuation specialists, we assessed and

challenged the key assumptions used by comparing them to available market information

and corroborated key inputs to supporting documentation;

• Considered market transactions in close proximity to the year-end and assessed their

appropriateness as being representative of fair value; and

• For the sole private investment company life science investment we obtained

independent conﬁrmation, from the administrator of that private investment company,

of the net asset value per share and reconciled these to the net asset value used in the

Group’s valuation. Further we obtained the coterminous audited ﬁnancial statements for

the private investment company to corroborate the net asset value per share used. We also

evaluated the accounting framework and accounting policies applied and considered the

impact, if any, of the issued audit opinion therein.

Assessing disclosures:

We also considered whether the Group’s ﬁnancial statement disclosures in relation to the

use of estimates and judgements regarding the fair value of investments in securities and

the Company’s investment valuation policies adopted and the fair value disclosures, in

notes 1 and 2 respectively, are in accordance with US GAAP.

Strategic Report Governance Report Financial Statements Additional Information

Independent Auditor’s Report to the Members of RTW Venture Fund Limited

continued

Our application of materiality and

an overview of the scope of our audit

Materiality for the consolidated ﬁnancial statements as

awhole was set at $6.9m, determined with reference to

abenchmark of group net assets of $347.9m, of which it

represents approximately 2% (2021: 2%).

In line with our audit methodology, our procedures on

individual account balances and disclosures were performed

to a lower threshold, performance materiality, so as to reduce

to an acceptable level the risk that individually immaterial

misstatements in individual account balances add up to a

material amount across the consolidated ﬁnancial statements

as a whole. Performance materiality for the Group was set at

75% (2021: 75%) of materiality for the consolidated ﬁnancial

statements as a whole, which equates to $5.2m. We applied

this percentage in our determination of performance

materiality because we did not identify any factors indicating

an elevated level of risk.

We reported to the Audit Committee any corrected or

uncorrected identiﬁed misstatements exceeding $0.35m, in

addition to other identiﬁed misstatements that warranted

reporting on qualitative grounds.

Our audit of the Group was undertaken to the materiality

level speciﬁed above, which has informed our identiﬁcation of

signiﬁcant risks of material misstatement and the associated

audit procedures performed in those areas as detailed above.

The group team performed the audit of the Group as if it was

a single aggregated set of ﬁnancial information. The audit was

performed using the materiality level set out above and

covered 100% of total group revenue, total group proﬁt

before tax, and total group assets and liabilities.

Going concern

The directors have prepared the consolidated ﬁnancial

statements on the going concern basis as they do not

intend to liquidate the Group or the Company or to cease

their operations, and as they have concluded that the Group

and the Company’s ﬁnancial position means that this is

realistic. They have also concluded that there are no material

uncertainties that could have cast signiﬁcant doubt over their

ability to continue as a going concern for at least a year from

the date of approval of the consolidated ﬁnancial statements

(the “going concern period”).

In our evaluation of the directors’ conclusions, we considered

the inherent risks to the Group and the Company’s business

model and analysed how those risks might aﬀect the Group

and the Company’s ﬁnancial resources or ability to continue

operations over the going concern period. The risks that we

considered most likely to aﬀect the Group and the Company’s

ﬁnancial resources or ability to continue operations over this

period was the availability of capital to meet operating costs

and other ﬁnancial commitments.

We considered whether this risk could plausibly aﬀect the

liquidity in the going concern period by comparing severe, but

plausible downside scenarios that could arise from this risk

against the level of available ﬁnancial resources indicated by

the Group and the Company’s ﬁnancial forecasts.

We performed procedures including:

• identifying journal entries and other adjustments to test

based on risk criteria and comparing any identiﬁed entries

to supporting documentation;

• incorporating an element of unpredictability in our audit

procedures; and

• assessing signiﬁcant accounting estimates for bias

Further detail in respect of valuation of private unquoted life

science investments is set out in the key audit matter section

of this report.

Identifying and responding to risks of material

misstatement due to non-compliance with laws

and regulations

We identiﬁed areas of laws and regulations that could

reasonably be expected to have a material eﬀect on the

consolidated ﬁnancial statements from our sector experience

and through discussion with management (as required by

auditing standards), and from inspection of the Group’s

regulatory and legal correspondence, if any, and discussed

with management the policies and procedures regarding

compliance with laws and regulations. As the Group is

regulated, our assessment of risks involved gaining an

understanding of the control environment including the

entity’s procedures for complying with regulatory

requirements.

The Group is subject to laws and regulations that directly

aﬀect the consolidated ﬁnancial statements including

ﬁnancial reporting legislation and taxation legislation and

we assessed the extent of compliance with these laws and

regulations as part of our procedures on the related ﬁnancial

statement items.

The Group is subject to other laws and regulations where the

consequences of non-compliance could have a material eﬀect

on amounts or disclosures in the consolidated ﬁnancial

statements, for instance through the imposition of ﬁnes or

litigation or impacts on the Group and the Company’s ability

to operate. We identiﬁed ﬁnancial services regulation as being

the area most likely to have such an eﬀect, recognising the

regulated nature of the Group’s activities and its legal form.

Auditing standards limit the required audit procedures to

identify non-compliance with these laws and regulations to

enquiry of management and inspection of regulatory and legal

correspondence, if any. Therefore if a breach of operational

regulations is not disclosed to us or evident from relevant

correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect

fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an

unavoidable risk that we may not have detected some

material misstatements in the consolidated ﬁnancial

statements, even though we have properly planned and

performed our audit in accordance with auditing standards.

For example, the further removed non-compliance with laws

and regulations is from the events and transactions reﬂected

in the consolidated ﬁnancial statements, the less likely the

inherently limited procedures required by auditing standards

would identify it.

We considered whether the going concern disclosure in note 1 to

the consolidated ﬁnancial statements gives a full and accurate

description of the directors’ assessment of going concern.

Our conclusions based on this work:

• we consider that the directors’ use of the going concern

basis of accounting in the preparation of the consolidated

ﬁnancial statements is appropriate;

• we have not identiﬁed, and concur with the directors’

assessment that there is not, a material uncertainty

related to events or conditions that, individually or

collectively, may cast signiﬁcant doubt on the Group and

the Company’s ability to continue as a going concern for

the going concern period; and

• we have nothing material to add or draw attention to in

relation to the directors’ statement in the notes to the

consolidated ﬁnancial statements on the use of the going

concern basis of accounting with no material uncertainties

that may cast signiﬁcant doubt over the Group and the

Company’s use of that basis for the going concern period,

and that statement is materially consistent with the

consolidated ﬁnancial statements and our audit knowledge.

However, as we cannot predict all future events or conditions

and as subsequent events may result in outcomes that are

inconsistent with judgements that were reasonable at the

time they were made, the above conclusions are not a

guarantee that the Group and the Company will continue

in operation.

Fraud and breaches of laws

and regulations – ability to detect

Identifying and responding to risks of material

misstatement due to fraud

To identify risks of material misstatement due to fraud

(“fraud risks”) we assessed events or conditions that could

indicate an incentive or pressure to commit fraud or provide

an opportunity to commit fraud. Our risk assessment

procedures included:

• enquiring of management as to the Group’s policies

and procedures to prevent and detect fraud as well as

enquiring whether management have knowledge of any

actual, suspected or alleged fraud;

• reading minutes of meetings of those charged with

governance; and

• using analytical procedures to identify any unusual

or unexpected relationships.

As required by auditing standards, and taking into account

possible incentives or pressures to misstate performance and

our overall knowledge of the control environment, we perform

procedures to address the risk of management override of

controls, in particular the risk that management may be in

a position to make inappropriate accounting entries, and

the risk of bias in accounting estimates such as valuation of

private unquoted life science investments. On this audit we do

not believe there is a fraud risk related to revenue recognition

because the Group’s revenue streams are simple in nature

with respect to accounting policy choice, and are easily

veriﬁable to external data sources or agreements with little

or no requirement for estimation from management. We did

not identify any additional fraud risks.

In addition, as with any audit, there remains a higher risk of

non-detection of fraud, as this may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of

internal controls. Our audit procedures are designed to

detect material misstatement. We are not responsible for

preventing non-compliance or fraud and cannot be expected

to detect non-compliance with all laws and regulations.

Other information

The directors are responsible for the other information. The

other information comprises the information included in the

annual report but does not include the consolidated ﬁnancial

statements and our auditor’s report thereon. Our opinion on

the consolidated ﬁnancial statements does not cover the

other information and we do not express an audit opinion

or any form of assurance conclusion thereon.

In connection with our audit of the consolidated ﬁnancial

statements, our responsibility is to read the other

information and, in doing so, consider whether the other

information is materially inconsistent with the consolidated

ﬁnancial statements or our knowledge obtained in the audit,

or otherwise appears to be materially misstated. If, based on

the work we have performed, we conclude that there is a

material misstatement of this other information, we are

required to report that fact. We have nothing to report

in this regard.

Disclosures of emerging and principal

risks and longer term viability

We are required to perform procedures to identify whether

there is a material inconsistency between the directors’

disclosures in respect of emerging and principal risks and the

viability statement, and the consolidated ﬁnancial statements

and our audit knowledge. We have nothing material to add or

draw attention to in relation to:

• the directors’ conﬁrmation within the Longer Term

Viability Statement (page 37) that they have carried out

a robust assessment of the emerging and principal risks

facing the Group, including those that would threaten its

business model, future performance, solvency or liquidity;

• the emerging and principal risks disclosures describing

these risks and explaining how they are being managed

or mitigated;

• the directors’ explanation in the Longer Term Viability

Statement (page 37) as to how they have assessed the

prospects of the Group, over what period they have done

so and why they consider that period to be appropriate,

and their statement as to whether they have a reasonable

expectation that the Group will be able to continue in

operation and meet its liabilities as they fall due over

the period of their assessment, including any related

disclosures drawing attention to any necessary

qualiﬁcations or assumptions.

We are also required to review the Longer Term Viability

Statement, set out on page 37 under the Listing Rules. Based

on the above procedures, we have concluded that the above

disclosures are materially consistent with the consolidated

ﬁnancial statements and our audit knowledge.

6564

Strategic Report Governance Report Financial Statements Additional Information

Independent Auditor’s Report to the Members of RTW Venture Fund Limited

continued

Corporate governance disclosures

We are required to perform procedures to identify whether

there is a material inconsistency between the directors’

corporate governance disclosures and the consolidated

ﬁnancial statements and our audit knowledge.

Based on those procedures, we have concluded that each of

the following is materially consistent with the consolidated

ﬁnancial statements and our audit knowledge:

• the directors’ statement that they consider that the

annual report and consolidated ﬁnancial statements

takenas a whole is fair, balanced and understandable, and

provides the information necessary for shareholders to

assess the Company’s position and performance, business

model and strategy;

• the section of the annual report describing the work of the

Audit Committee, including the signiﬁcant issues that the

audit committee considered in relation to the ﬁnancial

statements, and how these issues were addressed; and

• the section of the annual report that describes the review

of the eﬀectiveness of the Company’s risk management

and internal control systems.

We are required to review the part of Corporate Governance

Statement relating to the Company’s compliance with the

provisions of the UK Corporate Governance Code speciﬁed by

the Listing Rules for our review. We have nothing to report in

this respect.

We have nothing to report on other matters on which we

are required to report by exception

We have nothing to report in respect of the following matters

where the Companies (Guernsey) Law, 2008 requires us to

report to you if, in our opinion:

• the Company has not kept proper accounting records; or

• the consolidated ﬁnancial statements are not in agreement

with the accounting records; or

• we have not received all the information and explanations,

which to the best of our knowledge and belief are

necessary for the purpose of our audit.

2022 2021

ASSETS:

Investments in securities, at fair value (cost at 31 December 2022: $259,472,596; 31 December 2021: $271,421,062) 350,125,577 409,179,507

Derivative contracts, at fair value (cost at 31 December 2022: $2,614,659; 31 December 2021: $2,348,062) 21,467,649 10,983,574

Cash and cash equivalents 6,966,168 6,484,057

Due from brokers 22,195,456 12,323,965

Receivable from unsettled trades 439,798 200,695

Other assets 345,750 191,565

TOTAL ASSETS 401,540,398 439,363,363

LIABILITIES:

Securities sold short, at fair value (proceeds at 31 December 2022: $15,407,927; 31 December 2021: $9,620,981) 12,438,334 9,318,393

Derivative contracts, at fair value (proceeds at 31 December 2022: nil; 31 December 2021: $nil) 8,926,743 3,310,833

Due to brokers 25,823,016 38,019,859

Payable for unsettled trades 5,561,560 492,007

Accrued expenses 866,756 861,545

TOTAL LIABILITIES 53,616,409 52,002,637

TOTAL NET ASSETS 347,923,989 387,360,726

NET ASSETS attributable to Ordinary Shares (shares at 31 December 2022: 212,389,138;

31 December 2021: 212,389,138) 326,079,521 363,040,222

NET ASSETS attributable to Non-Controlling Interest 21,844,468 –

NET ASSETS attributable to Performance Allocation Shares (shares at 31 December 2022: 0;

31 December 2021: 1) – 24,320,504

NAV per Ordinary Share 1.5353 1.7093

The audited consolidated ﬁnancial statements of the Group were approved and authorised for issue by the Board of Directors on 30 March 2023 and

signed on its behalf by:

William Simpson Paul Le Page

Chairman Director

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Statement of Assets and Liabilities

as at 31 December 2022 and 31 December 2021

(Expressed in United States Dollars)

Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page

54, the directors are responsible for: the preparation of the

consolidated ﬁnancial statements including being satisﬁed

that they give a true and fair view; such internal control as

they determine is necessary to enable the preparation of

consolidated ﬁnancial statements that are free from material

misstatement, whether due to fraud or error; assessing the

Group and Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern;

and using the going concern basis of accounting unless

liquidation is imminent.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about

whether the consolidated ﬁnancial statements as a whole are

free from material misstatement, whether due to fraud or

error, and to issue our opinion in an auditor’s report. Reasonable

assurance is a high level of assurance, but does not guarantee

that an audit conducted in accordance with ISAs (UK) will always

detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if,

individually or in aggregate, they could reasonably be expected

to inﬂuence the economic decisions of users taken on the basis

of the consolidated ﬁnancial statements.

A fuller description of our responsibilities is provided on the

FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of this report and restrictions on its use by

persons other than the Company’s members as a body

This report is made solely to the Company’s members, as

a body, in accordance with section 262 of the Companies

(Guernsey) Law, 2008. Our audit work has been undertaken

so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility

to anyone other than the Company and the Company’s

members, as a body, for our audit work, for this report,

or for the opinions we have formed.

Dermot Dempsey

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors

Guernsey

30 March 2023

6766

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Descriptions Number of Shares Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value

Common stocks

United States

Healthcare

Prometheus Biosciences, Inc. 670,916 6,802,058 52,946,904 15.22

Rocket Pharmaceuticals, Inc. 2,400,755 8,188,796 46,982,775 13.50

Others* 124,096,539 118,157,365 33.96

Total United States 139,087,393 218,087,044 62.68

Netherlands

Healthcare 4,368,486 5,345,551 1.54

Ireland

Healthcare 4,099,988 2,981,309 0.86

Canada

Healthcare 3,275,323 1,012,216 0.29

British Virgin Islands

Healthcare 547,564 997,552 0.29

China

Healthcare

Ji Xing Pharmaceuticals Ltd. 541,205 216,482 600,738 0.17

Cayman Islands

Financials 254,581 257,459 0.07

Healthcare 188,880 194,370 0.06

Total Cayman Islands 443,461 451,829 0.13

Bermuda

Healthcare 260,330 208,004 0.06

Belgium

Healthcare 165,629 32,919 0.01

Total common stocks 152,464,656 229,717,162 66.03

* No individual investment security or contract constitutes greater than 5 percent of net assets.

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments

as at 31 December 2022

(Expressed in United States Dollars)

Descriptions

Number

of Shares Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value (continued)

Convertible preferred stocks

United States

Healthcare* 44,011,844 38,108,351 10.95

China

Healthcare

Ji Xing Pharmaceuticals Ltd. 10,599,945 14,824,185 16,433,316 4.73

Others 1,771,209 1,622,898 0.47

Total China 16,595,394 18,056,214 5.20

Switzerland

Healthcare 1,729,518 1,768,384 0.51

Ireland

Healthcare 116,545 117,696 0.03

Total convertible preferred stocks 62,453,301 58,050,645 16.69

American depository receipts

United Kingdom

Healthcare

Immunocore Holdings plc 453,985 11,440,789 25,908,924 7.45

Others 1,064,820 813,170 0.23

Total United Kingdom 12,505,609 26,722,094 7.68

Netherlands

Healthcare 8,996,563 9,918,906 2.85

Ireland

Healthcare 893,338 961,567 0.28

Sweden

Healthcare 339,248 528,539 0.15

Israel

Healthcare 372,743 98,985 0.03

Total American depository receipts 23,107,501 38,230,091 10.99

* No individual investment security or contract constitutes greater than 5 percent of net assets.

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2022

(Expressed in United States Dollars)

6968

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Descriptions Number of Shares Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value (continued)

Investment in private investment companies

Ireland

Healthcare 11,814,933 14,074,846 4.04

Total investment in private investment companies 11,814,933 14,074,846 4.04

Convertible notes

China

Healthcare

Ji Xing Pharmaceuticals Ltd. 762,474 7,624,737 8,191,552 2.35

United States

Healthcare 2,007,468 1,861,281 0.53

Total convertible notes 9,632,205 10,052,833 2.88

Total investments in securities, at fair value 259,472,596 350,125,577 100.63

See accompanying notes to the consolidated ﬁnancial statements.

Descriptions Cost Fair Value

Percentage

of Net Assets

Derivative contracts – assets, at fair value

Equity swaps

United States

Healthcare 16,781,963 4.83

British Virgin Islands

Healthcare 2,097,803 0.60

Ireland

Healthcare 206,563 0.06

Total equity swaps 19,086,329 5.49

Warrants

Canada

Healthcare 1,939,543 1,858,925 0.53

United States

Healthcare 674,517 522,337 0.15

Cayman Islands

Financials 599 58 0.00

Total warrants 2,614,659 2,381,320 0.68

Total derivative contracts – assets, at fair value 2,614,659 21,467,649 6.17

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2022

(Expressed in United States Dollars)

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2022

(Expressed in United States Dollars)

7170

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Descriptions Proceeds Fair Value

Percentage

of Net Assets

Securities sold short, at fair value

Common stocks

United States

Healthcare 14,521,155 11,500,094 3.31

Netherlands

Healthcare 293,711 221,800 0.06

Cayman Islands

Financials 96,480 98,829 0.03

Healthcare 46,260 89,072 0.03

Total Cayman Islands 142,740 187,901 0.06

Total common stocks 14,957,606 11,909,795 3.43

American depository receipts

Sweden

Healthcare 450,321 528,539 0.15

Total American depository receipts 450,321 528,539 0.15

Total securities sold short, at fair value 15,407,927 12,438,334 3.58

Descriptions Fair Value

Percentage

of Net Assets

Derivative contracts – liabilities, at fair value

Equity swaps

United States

Healthcare 7,041,281 2.02

Index 1,860,052 0.54

Total United States 8,901,333 2.56

Israel

Healthcare 25,410 0.01

Total derivative contracts – liabilities, at fair value 8,926,743 2.57

See accompanying notes to the consolidated ﬁnancial statements.

Descriptions Number of Shares Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value

Common stocks

United States

Financials 108,150 106,527 0.03

Healthcare

Prometheus Biosciences, Inc. 740,564 5,396,652 21,850,828 5.64

Rocket Pharmaceuticals, Inc. 2,364,728 6,223,376 51,622,012 13.33

Others* 131,292,813 177,272,154 45.76

Materials 45,415 9,801 0.00

Total United States 143,066,406 250,861,322 64.76

Ireland

Healthcare 4,099,989 7,155,755 1.85

Netherlands

Healthcare 3,339,207 4,302,049 1.11

Canada

Healthcare 4,400,407 2,573,859 0.66

China

Healthcare

Ji Xing Pharmaceuticals Ltd. 541,205 216,482 844,280 0.22

British Virgin Islands

Healthcare 226,450 689,080 0.18

Cayman Islands

Financials 422,961 414,583 0.11

Healthcare 104,050 103,530 0.03

Total Cayman Islands 527,011 518,113 0.14

Bermuda

Healthcare 260,330 262,413 0.07

Belgium

Healthcare 207,840 146,096 0.04

Switzerland

Healthcare 106,002 83,035 0.02

Total common stocks 156,450,124 267,436,002 69.05

* No individual investment security or contract constitutes greater than 5 percent of net assets.

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments

as at 31 December 2021

(Expressed in United States Dollars)

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2022

(Expressed in United States Dollars)

7372

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Descriptions

Number

of Shares Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value (continued)

Convertible preferred stocks

United States

Healthcare* 35,924,442 39,402,135 10.17

China

Healthcare

Ji Xing Pharmaceuticals Ltd. 10,599,945 14,824,184 24,793,386 6.40

Others 1,771,209 1,771,209 0.46

Total China 16,595,393 26,564,595 6.86

Switzerland

Healthcare 1,704,186 1,693,165 0.44

Ireland

Healthcare 116,545 132,819 0.03

Total convertible preferred stocks 54,340,566 67,792,714 17.50

Exchange traded funds

United States

Index

SPDR S&P 500 ETF TRUST 67,579 26,216,888 32,097,322 8.28

Total exchange traded funds 26,216,888 32,097,322 8.28

Investment in private investment companies

Ireland

Healthcare 11,814,933 13,068,663 3.37

United States

Healthcare 8,234,839 10,013,859 2.59

Total investment in private investment companies 20,049,772 23,082,522 5.96

* No individual investment security or contract constitutes greater than 5 percent of net assets.

See accompanying notes to the consolidated ﬁnancial statements.

Descriptions Cost Fair Value

Percentage

of Net Assets

Investments in securities, at fair value (continued)

American depository receipts

United Kingdom

Healthcare 7,368,293 12,033,889 3.11

Netherlands

Healthcare 3,786,165 3,962,050 1.02

Ireland

Healthcare 893,338 1,085,120 0.28

Sweden

Healthcare 438,397 388,133 0.10

Israel

Healthcare 372,855 308,578 0.08

China

Healthcare 549,132 202,418 0.05

Singapore

Healthcare 231,809 67,036 0.02

Total American depository receipts 13,639,989 18,047,224 4.66

Convertible bonds

United States

Healthcare 723,723 723,723 0.18

Total convertible bonds 723,723 723,723 0.18

Total investments in securities, at fair value 271,421,062 409,179,507 105.63

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2021

(Expressed in United States Dollars)

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2021

(Expressed in United States Dollars)

7574

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Descriptions Cost Fair Value

Percentage

of Net Assets

Derivative contracts – assets, at fair value

Equity swaps

United States

Healthcare 5,442,939 1.41

British Virgin Islands

Healthcare 2,128,260 0.55

Netherlands

Healthcare 4,225 0.00

Total equity swaps 7,575,424 1.96

Warrants

Canada

Healthcare 1,939,543 3,077,816 0.79

United States

Healthcare 407,920 329,865 0.09

Cayman Islands

Financials 599 469 0.00

Total warrants 2,348,062 3,408,150 0.88

Total derivative contracts – assets, at fair value 2,348,062 10,983,574 2.84

See accompanying notes to the consolidated ﬁnancial statements.

Descriptions Proceeds Fair Value

Percentage

of Net Assets

Securities sold short, at fair value

Common stocks

United States

Healthcare 8,526,920 8,330,314 2.15

Materials 56,309 9,801 0.00

Total United States 8,583,229 8,340,115 2.15

Netherlands

Healthcare 278,805 324,576 0.09

Cayman Islands

Financials 96,480 97,018 0.03

Switzerland

Healthcare 106,146 83,035 0.02

Total common stocks 9,064,660 8,844,744 2.29

American depository receipts

Sweden

Healthcare 462,836 388,133 0.10

China

Healthcare 93,485 85,516 0.02

Total American depository receipts 556,321 473,649 0.12

Total securities sold short, at fair value 9,620,981 9,318,393 2.41

Descriptions Fair Value

Percentage

of Net Assets

Derivative contracts – liabilities, at fair value

Equity swaps

United States

Healthcare 3,223,278 0.83

Ireland

Healthcare 52,601 0.01

Israel

Healthcare 34,954 0.01

Total derivative contracts – liabilities, at fair value 3,310,833 0.85

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2021

(Expressed in United States Dollars)

Consolidated Condensed Schedule of Investments (continued)

as at 31 December 2021

(Expressed in United States Dollars)

7776

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

2022 2021

Investment income

Interest (net of withholding taxes of $nil; 31 December 2021: $nil) 635,860 363,673

Dividends (net of withholding tax rebate of $123,149; 31 December 2021: tax expense $123,894) 332,103 294,027

Other 1,199,296 –

Total investment income 2,167,259 657,700

Expenses

Management fees 3,751,464 4,813,854

Professional fees 1,008,629 1,070,317

Interest 779,988 215,606

Research costs 742,738 237,984

Audit fees 329,557 288,254

Administrative fees 312,003 330,834

Directors’ fees 176,722 214,353

Listing fees – 936,615

Other expenses 357,429 346,867

Total expenses 7,458,530 8,454,684

Net investment income/(loss) (5,291,271) (7,796,984)

Realised and change in unrealised gain/(loss) on investments, derivatives and foreign currency transactions

Net realised gain/(loss) on securities and foreign currency transactions 8,357,014 41,280,297

Net change in unrealised gain/(loss) on securities and foreign currency translation (44,355,779) (99,115,160)

Net realised gain/(loss) on derivative contracts (2,748,269) (1,648,961)

Net change in unrealised gain/(loss) on derivative contracts 4,601,568 2,936,018

Net realised and unrealised gain/(loss) on investments, derivatives and foreign currency transactions (34,145,466) (56,547,806)

Net increase/(decrease) in net assets resulting from operations (39,436,737) (64,344,790)

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Statement of Operations

For the year ended 31 December 2022 and 31 December 2021

(Expressed in United States Dollars)

Ordinary Share

Class

Performance

Allocation Share

Class

Tot al

Shareholders’

Funds

Non-Controlling

Interest

Net assets, beginning of year 363,040,222 24,320,504 387,360,726 –

Operations

Net investment income/(loss) (5,291,271) – (5,291,271) –

Net realised gain/(loss) on securities and foreign currency transactions 8,357,014 – 8,357,014 –

Net change in unrealised gain/(loss) on securities and foreign currency translation (44,355,779) – (44,355,779) –

Net realised gain/(loss) on derivative contracts (2,748,269) – (2,748,269) –

Net change in unrealised gain/(loss) on derivative contracts 4,601,568 – 4,601,568 –

Performance Allocation 4,359,551 (4,359,551) – –

Income/(loss) attributable to Non-Controlling Interest (1,883,515) – (1,883,515) 1,883,515

Net change in net assets resulting from operations (36,960,701) (4,359,551) (41,320,252) 1,883,515

Capital transactions

In-kind transfer – (19,960,953) (19,960,953) 19,960,953

Net change in net assets resulting from capital transactions – (19,960,953) (19,960,953) 19,960,953

Net change in net assets (36,960,701) (24,320,504) (61,281,205) 21,844,468

Net assets, end of year 326,079,521 – 326,079,521 21,844,468

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Statement of Changes in Net Assets

For the year ended 31 December 2022

(Expressed in United States Dollars)

7978

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Ordinary Share

Class

Performance

Allocation Share

Class

Tot al

Shareholders’

Funds

Net assets, beginning of year 375,281,126 37,330,803 412,611,929

Operations

Net investment income/(loss) (7,796,984) – (7,796,984)

Net realised gain/(loss) on securities and foreign currency transactions 41,280,297 – 41,280,297

Net change in unrealised gain/(loss) on securities and foreign currency translation (99,115,160) – (99,115,160)

Net realised gain/(loss) on derivative contracts (1,648,961) – (1,648,961)

Net change in unrealised gain/(loss) on derivative contracts 2,936,018 – 2,936,018

Performance Allocation 8,035,379 (8,035,379) –

Net change in net assets resulting from operations (56,309,411) (8,035,379) (64,344,790)

Capital transactions

Issuance of Ordinary Shares (net of issuance costs of $222,883) 44,068,507 – 44,068,507

Performance Allocation distribution – (4,974,920) (4,974,920)

Net change in net assets resulting from capital transactions 44,068,507 (4,974,920) 39,093,587

Net change in net assets (12,240,904) (13,010,299) (25,251,203)

Net assets, end of year 363,040,222 24,320,504 387,360,726

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Statement of Changes in Net Assets

For the year ended 31 December 2021

(Expressed in United States Dollars)

2022 2021

Cash ﬂows from operating activities

Net increase/(decrease) in net assets resulting from operations (39,436,737) (64,344,790)

Adjustments to reconcile net change in net assets resulting from operations to net cash provided by/(used in)

operating activities:

Net realised (gain)/loss on securities and foreign currency transactions (8,357,014) (41,280,297)

Net change in unrealised (gain)/loss on securities and foreign currency translation 44,355,779 99,115,160

Net realised (gain)/loss on derivative contracts 2,748,269 1,648,961

Net change in unrealised (gain)/loss on derivative contracts (4,601,568) (2,936,018)

Eﬀect of exchange rate changes on cash and cash equivalents 149,875 –

Purchases of investments in securities (116,361,329) (202,925,739)

Proceeds from sales of investments in securities 127,814,762 119,715,056

Proceeds from securities sold short 27,488,465 15,049,848

Payments for securities sold short (12,916,667) (5,416,866)

Proceeds from derivative contracts 1,971,402 (784,778)

Payments for derivative contracts (4,986,268) (1,466,746)

Changes in operating assets and liabilities:

Other assets (154,185) (66,990)

(Receivable from)/payable for unsettled trades 4,830,450 830,880

Due to brokers (12,196,843) 37,658,827

Accrued expenses 5,211 331,475

Net cash provided by/(used in) operating activities 10,353,602 (44,872,017)

Cash ﬂows from ﬁnancing activities

Net proceeds from issuance of shares – 44,068,507

Performance Allocation distribution – (4,974,920)

Net cash provided by/(used in) ﬁnancing activities – 39,093,587

Net change in cash and cash equivalents 10,353,602 (5,778,430)

Cash, cash equivalents, and restricted cash, beginning of the year 18,808,022 24,586,452

Cash, cash equivalents, and restricted cash, end of the year 29,161,624 18,808,022

At 31 December 2022, the amounts categorised in cash, cash equivalents, and restricted cash include the following:

Cash and cash equivalents 6,966,168 6,484,057

Due from brokers 22,195,456 12,323,965

Total 29,161,624 18,808,022

Supplemental disclosure of cash ﬂow information

Cash paid during the year for interest 724,317 250,980

See accompanying notes to the consolidated ﬁnancial statements.

Consolidated Statement of Cash Flows

For the year ended 31 December 2022 and 31 December 2021

(Expressed in United States Dollars)

8180

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

1. Nature of operations and summary of signiﬁcant accounting policies

RTW Venture Fund Limited (the “Company”) is a publicly listed Guernsey non-cellular company limited by shares. The Company was originally incorporated

in the State of Delaware, United States of America, and re-domiciled into Guernsey under the Companies Law on 2 October 2019 with registration number

66847 on the Guernsey Register of Companies. On 30 October 2019, all of the issued Ordinary Shares of the Company were listed and admitted to trading

on the Specialist Fund Segment of the London Stock Exchange under the ticker symbol: RTW. Subsequently, on 6 August 2021, the Company’s Ordinary

Shares were admitted to trading on the Premium Segment of the London Stock Exchange with the additional ticker symbol: RTWG denoting the Sterling

price. The original ticker, RTW, continues to denote the US Dollar price.

On 1 December 2022 the Company changed its status for U.S. federal tax purposes from a publicly traded partnership to a corporation. The Group believes

that the change in status will cause it to be treated as a passive foreign investment company. This change has been necessitated by recent changes to U.S.

tax legislation due to come into eﬀect from 1 January 2023. The Company established a new wholly owned subsidiary, RTW Venture Fund Operating Limited

(the “Subsidiary” or “OpCo”), to which it has transferred its right to the proﬁts and losses attributable to the Group’s portfolio of assets. This reorganisation

will have no economic impact on shareholders. All the income and expenses of the Subsidiary are consolidated with the income and expenses of the Group.

The Group seeks to use equity capital (from the net proceeds of any share issuance or, where appropriate, from the net proceeds of investment divestments

or other related proﬁts) to provide seed and additional growth capital to the private investments. To mitigate cash-drag, the uninvested portion is invested

across public stocks largely replicating the public stock portfolios of RTW’s existing US-based funds. The Group focuses on creating, building, and supporting

world-class life sciences, biopharmaceutical and medical technology companies. The Group’s investment objective is to generate attractive risk-adjusted

returns through investments in securities, both equity and debt, long and short, of companies with a focus on the pharmaceutical sector.

Pursuant to an investment management agreement, the Group is managed by RTW Investments, LP, a Delaware limited partnership, to provide the

Group with discretionary portfolio management, risk management services and certain other services. The Investment Manager is an investment

adviser registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940.

Basis of presentation

The consolidated ﬁnancial statements are expressed in United States Dollars. The consolidated ﬁnancial statements which give a true and fair view

and have been prepared in accordance with US generally accepted accounting principles (“US GAAP”) and are in compliance with the Companies

(Guernsey) Law, 2008. The entities comprised within the Group are investment companies and follow the accounting and reporting guidance in

Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codiﬁcation Topic 946, Financial Services – Investment Companies.

The Directors considered that it is appropriate to adopt a going concern basis of accounting in preparing the consolidated ﬁnancial statements. In

reaching this assessment, the Directors have considered a wide range of information relating to present and future conditions including the balance

sheets, future projections, cash ﬂows and the longer-term strategy of the business.

Principles of consolidation

The consolidated ﬁnancial statements include accounts of the Company consolidated with the accounts of the Subsidiary. All inter-group balances

have been eliminated upon consolidation. The Subsidiary is incorporated in Guernsey.

Non-Controlling Interest

An aﬃliate of the Investment Manager, RTW Venture Performance LP, holds an interest in the Subsidiary. At 31 December 2022, the Non-Controlling

Interest of $21,844,468 represents the in-kind transfer on 1 December 2022 of $19,960,953 and mark to market of $1,883,515 for the period from

1December 2022 through 31 December 2022. The Non-Controlling Interest will capture both Performance Allocation and mark to market movements

on the New Performance Allocation Share held by RTW Venture Performance LP in the Subsidiary. For the year ended 31 December 2022, the entirety

of the income/(loss) attributable to Non-Controlling Interest was comprised of mark to market movements.

Cash, cash equivalents, and restricted cash

Cash represents cash deposits held at ﬁnancial institutions. Cash equivalents include short-term highly liquid investments of suﬃcient credit quality

that are readily convertible to known amounts of cash and have original maturities of three months or less. Cash equivalents are carried at cost plus

accrued interest, which approximates fair value. Cash equivalents are held for the purpose of meeting short-term liquidity requirements, rather than

for investment purposes. As at 31 December 2022 and 31 December 2021, the Group had no cash equivalents.

Restricted cash is subject to a legal or contractual restriction by third parties as well as a restriction as to withdrawal or use, including restrictions

that require the funds to be used for a speciﬁed purpose and restrictions that limit the purpose for which the funds can be used. The Group considers

cash pledged as collateral for securities sold short, cash collateral posted with counterparties for derivative contracts and further amounts due from

brokers to be restricted cash, as outlined in Note 3.

Fair value - deﬁnition and hierarchy

Fair value is deﬁned as the price that would be received to sell an asset or paid to transfer a liability (i.e. the ‘exit price’) in an orderly transaction

between market participants at the measurement date.

In determining fair value, the Group uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use

of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available. Observable

inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Group.

Unobservable inputs reﬂect the Group’s assumptions about the inputs market participants would use in pricing the asset or liability based on the best

information available in the circumstances. The fair value hierarchy is categorised into three levels based on the inputs as follows:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Group has the ability to access.

Valuation adjustments are not applied to Level 1 investments. Since valuations are based on quoted prices that are readily and regularly available

in an active market, valuation of these investments does not entail a signiﬁcant degree of judgement.

Notes to the Consolidated Financial Statements

For the year ended 31 December 2022

(Expressed in United States Dollars)

1. Nature of operations and summary of signiﬁcant accounting policies (continued)

Fair value - deﬁnition and hierarchy (continued)

Level 2 - Valuations based on inputs, other than quoted prices included in Level 1, that are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and signiﬁcant to the overall fair value measurement.

Investments in private investment companies measured using net asset value as a practical expedient are not categorized in the fair value hierarchy.

The availability of valuation techniques and observable inputs can vary from investment to investment and is aﬀected by a wide variety of factors,

including the type of investment, whether the investment is new and not yet established in the marketplace, and other characteristics particular to the

transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair

value requires more judgement. Those estimated values do not necessarily represent the amounts that may be ultimately realised due to the occurrence

of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be

materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of

judgement exercised by the Group in determining fair value is greatest for investments categorised in Level 3. In certain cases, the inputs used to

measure fair value may fall into diﬀerent levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within

which the fair value measurement falls in its entirety is determined based on the lowest level input that is signiﬁcant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-speciﬁc measure. Therefore, even

when market assumptions are not readily available, the Group’s own assumptions are set to reﬂect those that market participants would use in pricing

the asset or liability at the measurement date. The Group uses prices and inputs that are current as of the measurement date, including periods of

market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many investments. This condition could

cause an investment to be reclassiﬁed to a lower level within the fair value hierarchy.

Fair value – valuation techniques and inputs

Investments in securities and securities sold short

Listed investments

The Group values investments in securities including exchange traded funds and securities sold short that are freely tradable and are listed on a

national securities exchange or reported on the NASDAQ national market at their closing sales price as of the valuation date. To the extent these

securities are actively traded and valuation adjustments are not applied, they are categorised in Level 1 of the fair value hierarchy. Securities traded

on inactive markets or valued by reference to similar instruments or where a discount may be applied are categorised in Level 2 or 3 of the fair value

hierarchy. A discount for lack of marketability based on the 180-day restriction period under SEC Rule 144 is applied for investments that the Group

purchases prior to an IPO and that subsequently begin trading on the NASDAQ national market.

Unlisted investments

Unlisted investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the

Investment Manager. As part of their valuation process, the Investment Manager engages an Independent Valuer to challenge their assessed fair value on

certain unlisted investments. The Investment Manager’s unlisted investment valuation policy applies to techniques consistent with the IPEV Guidelines.

The valuation techniques applied are either a market-based approach, an income approach such as discounted cash ﬂows, or where available, a

net asset value practical expedient approach. The IPEV Guidelines recognise that the price of a recent transaction, if resulting from an orderly

transaction, generally represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at subsequent

measurement dates. Consideration is given to the facts and circumstances as at the subsequent measurement date including changes in the market

and/or performance of the investee company. Milestone analysis is used where appropriate to incorporate operational progress at the investee

company level. In addition, a trigger event such as a subsequent round of ﬁnancing by the investee company would inﬂuence the market technique

used to calibrate fair value at the measurement date.

The market approach utilizes guideline public companies relying on projected revenues to derive an indicative enterprise value. Due to the nature of

the investments, being in the early stages of development, the projected revenues are used as a proxy for stable state revenue. A selected multiple

is then applied based on the observed market multiples of the guideline public companies. To reﬂect the risk associated with the achievement of the

projected revenues and the early development stage of each of the investments, the indicative enterprise value is discounted at an appropriate rate.

The income approach utilizes the discounted cash ﬂow method. Projected cash ﬂows for each investment are discounted to determine an assumed

enterprise value.

Where applicable, the indicative enterprise value has been determined using a back-solve model based on the pricing of the most recent round of ﬁnancing.

The internal rate of return for each investment is compared to the selected venture capital rate applied in the market approach to assess the reasonableness

of the indicated value implied by each ﬁnancing round. The derived enterprise value is allocated to the equity class on either a fully diluted basis or using an

option pricing model. The resulting indicative value on a per share basis is then multiplied by the number of shares to derive the fair market value.

American depository receipts

The Group values investments in American depositary receipts that are freely tradable and are listed on a national securities exchange or reported onthe

NASDAQ national market at their last reported sales price as of the valuation date. These investments are categorised in Level 1 of the fair value hierarchy.

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

1. Nature of operations and summary of signiﬁcant accounting policies (continued)

Fair value – valuation techniques and inputs (continued)

Convertible bonds

Convertible bonds are recorded at fair value using valuation techniques based on observable inputs. These instruments are generally categorised in Level

2 of the fair value hierarchy. In instances where signiﬁcant inputs are unobservable, convertible bonds are categorised in Level 3 of the fair value hierarchy.

Convertible notes

The Group values investments in convertible notes in accordance with the unlisted investments section above. As of 31 December 2022,

these investments are all categorised in Level 3 of the fair value hierarchy.

Convertible preferred stock

The Group values Level 1 investments in convertible preferred stock that are listed on a national securities exchange at their closing sales price as of

the valuation date. Level 3 investments in convertible preferred stock are valued in accordance with the unlisted investments section above. As of 31

December 2022, these investments are categorised in Level 1 and Level 3 of the fair value hierarchy.

Investment in private investment companies

The Group values investment in private investment companies using the net asset values provided by the underlying private investment companies

asa practical expedient. The Group applies the practical expedient to its private investment companies on an investment-by-investment basis and

consistently with the Group’s entire position in a particular investment, unless it is probable that the Group will sell a portion of an investment at an

amount diﬀerent from the net asset value of the investment.

Private investment in public equity

Private investment in public equity (“PIPE”) cannot be oﬀered for sale to the public until the issuer complies with certain statutory or contractual requirements.

The Group generally values PIPE at a discount to similar publicly traded companies to the extent the restriction is speciﬁc to the security. The Group considers

the type and duration of the restriction, but in no event does the valuation exceed the listed price on any major securities exchange. PIPE is generally

categorized in Level 2 of the fair value hierarchy. However, to the extent that signiﬁcant inputs used to determine liquidity discounts are unobservable, PIPE

may be categorized in Level 3 of the fair value hierarchy. As of 31 December 2022 and 31December 2021, there were no open PIPE positions (2021: nil).

Derivative contracts

Equity swaps

Equity swaps may be centrally cleared or traded on the over-the-counter market. The fair value of equity swaps is calculated based on the terms of

the contract and current market data, such as changes in fair value of the reference asset. The fair value of equity swaps is generally categorised in

Level 2 of the fair value hierarchy.

Warrants

Warrants that are listed on major securities exchanges are valued at their last reported sales price as of the valuation date. The fair value of over-the-

counter (“OTC”) warrants is determined using the Black-Scholes option pricing model, a valuation technique that follows the income approach. This

pricing model takes into account the contract terms (including maturity) as well as multiple inputs, including time value, implied volatility, equity prices,

interest rates and currency rates. Warrants are categorised in all levels of the fair value hierarchy.

Fair value – valuation processes

The Group establishes valuation processes and procedures to ensure that the valuation techniques are fair and consistent, and valuation inputs

are supportable. The Group designates the Investment Manager’s Valuation Committee to oversee the entire valuation process of the Group’s

investments. The Valuation Committee comprises various members of the Investment Manager, including those separate from the Group’s portfolio

management and trading functions, and reports to the Board.

The Valuation Committee is responsible for developing the Group’s written valuation processes and procedures, conducting periodic reviews of the

valuation policies, and evaluating the overall fairness and consistent application of the valuation policies.

The Investment Manager’s Valuation Committee meets on a monthly basis or more frequently, as needed, to determine the valuations of the Group’s

Level 3 investments. Valuations determined by the Valuation Committee are required to be supported by market data, third-party pricing sources,

industry-accepted pricing models, counterparty prices or other methods they deem to be appropriate, including the use of internal proprietary

pricing models.

The Group periodically tests its valuations of Level 3 investments by performing back-testing. Back-testing involves the comparison of sales proceeds

of those investments to the most recent fair values reported and, if necessary, uses the ﬁndings to recalibrate its valuation procedures.

On a regular basis, the Group engages the services of a third-party valuation ﬁrm, the Independent Valuer, to perform an independent review of the

valuation of the Group’s Level 3 investments and the Group may adjust its valuations based on the recommendations from the Investment Manager’s

Valuation Committee.

Translation of foreign currency

Assets and liabilities denominated in foreign currencies are translated into United States Dollar amounts at the year-end exchange rates. Transactions

denominated in foreign currencies, including purchases and sales of investments, and income and expenses, are translated into United States Dollar

amounts on the transaction date. Adjustments arising from foreign currency transactions are reﬂected in the consolidated statement ofoperations.

1. Nature of operations and summary of signiﬁcant accounting policies (continued)

Fair value – valuation techniques and inputs (continued)

The Group does not isolate that portion of the results of operations arising from the eﬀect of changes in foreign exchange rates on investments from

ﬂuctuations arising from changes in market prices of investments held. Such ﬂuctuations are included in net realised and change in unrealised gain/

(loss) on securities, derivatives and foreign currency transactions in the consolidated statement of operations.

Reported net realised gain/(loss) from foreign currency transactions arise from sales of foreign currencies; currency gains or losses realised between

the trade and settlement dates on securities transactions; and the diﬀerence between the amounts of dividends, interest, and foreign withholding

taxes recorded on the Group’s books and the United States Dollar equivalent of the amounts actually received or paid.

Net change in unrealised gain/(loss) from foreign currency translation of assets and liabilities arises from changes in the fair values of assets

and liabilities, other than investments in securities at the end of the period, resulting from changes in exchange rates.

Investment transactions and related investment income

Investment transactions are accounted for on a trade date basis. Realised gains and losses on investment transactions have been calculated

on a speciﬁc identiﬁcation method.

Dividends are recorded on the ex-dividend date and interest is recognised on the accrual basis.

Withholding taxes on foreign dividends have been provided for in accordance with the Group’s understanding of the applicable country’s rules and rates.

Oﬀsetting of amounts related to certain contracts

Amounts due from and to brokers are presented on a net basis, by counterparty, to the extent the Group has the legal right to oﬀset the recognised

amounts and intends to settle on a net basis.

The Group has elected not to oﬀset fair value amounts recognised for cash collateral receivables and payables against fair value amounts recognised for

derivative positions executed with the same counterparty under the same master netting arrangement. At 31 December 2022, the Group had cash collateral

receivables of $16,384,706 (31 December 2021: $12,228,870) (see Note 3) with derivative counterparties under the same master nettingarrangement.

Income taxes

On 1 December 2022, the Company changed its status for US federal tax purposes from a publicly traded partnership (“PTP”) to a corporation. This

change by the Board was necessitated due to recent changes to US tax legislation that came into eﬀect on 1 January 2023. Pursuant to this, the Company

established OpCo, a partnership for US federal tax purposes, to which the Company transferred its portfolio of assets and the attributable proﬁts and

losses. The Company, as a corporation, is expected to be treated as a Passive Foreign Investment Company (“PFIC”) for US federal tax purposes.

The Company and Subsidiary are exempt from taxation in Guernsey and are each charged an annual exemption fee of £1,200. The Group will only be

liable to tax in Guernsey in respect of income arising or accruing from a Guernsey source, other than from a relevant bank deposit. It is not anticipated

that such Guernsey source taxable income will arise. The Group is managed so as not to be resident in the UK for UK tax purposes.

The Group recognises tax beneﬁts of uncertain tax positions only where the position is more likely than not to be sustained assuming examination by

a tax authority based on the technical merits of the position. In evaluating whether a tax position has met the recognition threshold, the Group must

presume the position will be examined by the appropriate taxing authority and that taxing authority has full knowledge of all relevant information.

A tax position meeting the more likely than not recognition threshold is measured to determine the amount of beneﬁt to recognise in the Group’s

consolidated ﬁnancial statements. Income tax and related interest and penalties would be recognised as a tax expense in the consolidated statement

of operations if the tax position was deemed to meet the more likely than not threshold.

The Investment Manager has analysed the Group’s tax positions and has concluded no liability for unrecognised tax beneﬁts should be recorded

related to uncertain tax positions. Further, management is not aware of any tax positions for which it is reasonably possible the total amounts of

unrecognised tax beneﬁts will signiﬁcantly change in the next twelve months.

The Company and OpCo each ﬁle income tax returns in the US federal jurisdiction and, as applicable, in US state or local jurisdictions, or non-US

jurisdictions. Generally, the Group was subject to income tax examinations by major taxing authorities for each tax period since inception. Based on

itsanalysis, the Group determined that it had not incurred any liability for unrecognised tax beneﬁts as of 31 December 2022 or 31 December 2021.

Use of estimates

Preparing consolidated ﬁnancial statements in accordance with US GAAP requires management to make estimates and assumptions in determining

the reported amounts of assets and liabilities, including the fair value of investments, and disclosure of contingent assets and liabilities as of the date

of the consolidated ﬁnancial statements and the reported amounts of income and expenses during the reporting period. Actual results could diﬀer

from those estimates.

New accounting pronouncements

In June 2022, the FASB issued ASU 2022-03, ASC Topic 820, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The amendment clariﬁes that contractual sale restrictions should not be considered when measuring the equity security’s fair value and prohibits an

entity from recognizing a contractual sale restriction as a separate unit of account. The amendments in this ASU are eﬀective for the Group beginning

after December 15, 2024. Early adoption is permitted for both interim and annual ﬁnancial statements that have not yet been issued or made available

for issuance. The Group does not expect this guidance to have a material impact on its consolidated ﬁnancial statements and related disclosures.

8584

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

2. Fair value measurements

The Group’s assets and liabilities recorded at fair value have been categorised based upon a fair value hierarchy as described in the Group’s signiﬁcant

accounting policies in Note 1.

The following table presents information about the Group’s assets and liabilities measured at fair value as of 31 December 2022:

	Level 1	Level 2	Level 3
				Investments
				measured at net
				asset value*	Tot al
Assets (at fair value)
Investments in securities
Common stocks	225,817,734	534,871	3,364,557	–	229,717,162
Convertible preferred stocks	117,696	–	57,932,949	–	58,050,645
American depository receipts	38,230,091	–	–	–	38,230,091
Investment in private investment companies	–	–	–	14,074,846	14,074,846
Convertible notes	–	–	10,052,833	–	10,052,833
Total investments in securities	264,165,521	534,871	71,350,339	14,074,846	350,125,577
Derivative contracts
Equity swaps	–	19,086,329	–	–	19,086,329
Warrants	–	1,904,409	476,911	–	2,381,320
Total derivative contracts	–	20,990,738	476,911		21,467,649
264,	165,521	21,525,609	71,827,250	14,074,846	371,593,226
Liabilities (at fair value)
Securities sold short
Common stocks	11,810,966	98,829	–	–	11,909,795
American depository receipts	528,539	–	–	–	528,539
Total securities sold short	12,339,505	98,829	–		12,438,334
Derivative contracts
Equity swaps	–	8,926,743	–	–	8,926,743
Total derivative contracts	–	8,926,743	–	–	8,926,743
	12,339,505	9,025,572	–	–	21,365,077

* The Group’s investment in private investment companies that are valued at their net asset value are not categorized within the fair value hierarchy.

2. Fair value measurements (continued)

The following table presents information about the Group’s assets and liabilities measured at fair value as of 31 December 2021:

	Level 1	Level 2	Level 3
				Investments
				measured at net
				asset value*	Tot al
Assets (at fair value)
Investments in securities
Common stocks	249,490,511	16,001,524	1,943,967	–	267,436,002
Convertible preferred stocks	615,444	–	67,177,270	–	67,792,714
Exchange traded funds	32,097,322	–	–	–	32,097,322
Investment in private investment companies	–	–	–	23,082,522	23,082,522
American depository receipts	18,047,224	–	–	–	18,047,224
Convertible bonds	–	–	723,723	–	723,723
Total investments in securities	300,250,501	16,001,524	69,844,960	23,082,522	409,179,507
Derivative contracts
Equity swaps	–	7,575,424	–	–	7,575,424
Warrants	6,576	3,267,566	134,008	–	3,408,150
Total derivative contracts	6,576	10,842,990	134,008	–	10,983,574
	300,257,077	26,844,514	69,978,968	23,082,522	420,163,081
Liabilities (at fair value)
Securities sold short
Common stocks	8,844,744	–	–	–	8,844,744
American depository receipts	473,649	–	–	–	473,649
Total securities sold short	9,318,393	–	–	–	9,318,393
Derivative contracts
Equity swaps	–	3,310,833	–	–	3,310,833
Total derivative contracts	–	3,310,833	–	–	3,310,833
	9,318,393	3,310,833	–	–	12,629,226

* The Group’s investment in private investment companies that are valued at their net asset value are not categorized within the fair value hierarchy.

Transfers between Levels 2 and 3 generally relate to whether signiﬁcant relevant observable inputs are available for the fair value measurements

in their entirety. See Note 1 for additional information related to the fair value hierarchy and valuation techniques and inputs. For the year ended

31December 2022, the Group had net transfers into Level 2 of $4,555,194 from Level 3 due to conversion into publicly traded common stocks subject

to an unexpired 180-day lock-up as at 31 December 2022 (2021: $9,064,760) and transfers into Level 1 of $nil from Level 3 due to conversion into

publicly traded common stocks (2021: $20,330,984). Transfers between levels are deemed to occur at year end.

8786

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

2. Fair value measurements (continued)

The following tables summarise the valuation techniques and signiﬁcant unobservable inputs used for the Group’s investments that are categorised

within Level 3 of the fair value hierarchy as of 31 December 2022 and 31 December 2021:

	Fair value at
	31 December 2022	Valuation techniques	Signiﬁcant unobservable inputs	Range of inputs
Assets (at fair value)
Investments in securities
Convertible preferred stocks	50,023,996	Discounted cash ﬂow;	WACC	13% – 33%
		and/or market approach;	Revenue multiples	2.8x – 4.0x
			Market step-up multiple	0.7x – 1.5x
			Market rate of returns	-30% – 20%
	7,908,953	Price of most recent funding round	n/a	n/a
Convertible notes	8,772,349	Discounted cash ﬂow;	WACC	13%
		and/or market approach;	Revenue multiples	4.0x
			Market step-up multiple	0.7x – 1.1x
			Market rate of returns	0%
	1,280,484	Probability weighted expected
		return method (“PWERM”)
			Market rate of returns
			Recovery rate
				-30%
				0% – 50%
Common stocks	1,208,299	Discounted cash ﬂow;	WACC	13%
		and/or market approach;	Revenue multiples	0.2x – 4x
			Market step-up multiple	0.7x – 1.1x
			Market rate of returns	-10%
	2,156,109	PWERM	Probability of business
			combination
				95%
	149	Price of most recent funding round	n/a	n/a
Total investments in securities	71,350,339
Derivative contracts
Warrants	315,589	Discounted cash ﬂow;	WACC	33%
		Market approach;	Revenue multiple	4.0x
		and/or option pricing model	Market rate of returns	10%
			Expected volatility	53%
	161,322	PWERM	Expected volatility	25%
Total derivative contracts	476,911

2. Fair value measurements (continued)

	Fair value at
	31 December 2021	Valuation techniques	Signiﬁcant unobservable inputs	Range of inputs
Assets (at fair value)
Investments in securities
Convertible preferred stocks	60,740,530	Discounted cash ﬂow;	WACC	16% – 38%
		Market approach;	Exit revenue multiple	3.0x – 4.0x
		and/or option pricing model	Expected volatility	40% – 135%
			Market step-up multiple	1.0x – 1.8x
	6,436,740	Price of most recent funding round	n/a	n/a
Common stocks	844,280	Market approach;	Expected volatility	60%
		and/or option pricing model	Market step-up multiple	1.1x – 1.7x
	1,099,687	Price of most recent funding round	n/a	n/a
Convertible bonds	723,723	Price of most recent funding round	n/a	n/a
Total investments in securities	69,844,960
Derivative contracts
Warrants	133,983	Price of most recent funding round	n/a	n/a
	25	Discounted cash ﬂow;	WACC	38%
		Market approach;	Exit revenue multiple	3.0x
		and/or option pricing model	Expected volatility	45%
Total derivative contracts	134,008

The signiﬁcant unobservable inputs used in the fair value measurements of Level 3 common stock, convertible preferred stocks, convertible notes, and

warrants include, but are not limited to, WACC, revenue and/or earnings multiple, market rate of return, and expected volatility. Increases in the WACC

in isolation would result in a lower fair value for the security, and vice versa. Increases in multiples and/or market rate of returns in isolation would

result in a higher fair value of the security, and vice versa. A change in volatility in isolation could result in a higher or lower fair value for the security.

The table below presents additional information about Level 3 assets and liabilities measured at fair value. Both observable and unobservable inputs

may be used to determine the fair value of positions that the Group has classiﬁed within the Level 3 category. As a result, the unrealised gains and

losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and

unobservable inputs.

Changes in Level 3 assets and liabilities measured at fair value for the year ended 31 December 2022 were as follows:

	Balance beginning
	1 January 2022
		Realised gains/
		(losses)
		(a)
			Change in
			Unrealised gains/
			(losses)
			(a)
				Purchases	Sales
						Transfers into/
						(from) Level 3*
							Ending balance
							31 December 2022
Assets (at fair value)
Investments in securities
Convertible preferred stocks	67,177,270	–	(17,555,053)	12,142,203	–	(3,831,471)	57,932,949
Common stocks	1,943,967	–	(664,647)	2,085,237	–	–	3,364,557
Convertible notes	–	–	420,628	8,195,772	–	1,436,433	10,052,833
Convertible bonds	723,723	–	–	1,436,433	–	(2,160,156)	–
Total investments in securities	69,844,960	–	(17,799,072)	23,859,645	–	(4,555,194)	71,350,339
Derivative contracts
Warrants	134,008	–	76,306	266,597	–	–	476,911
Total derivative contracts	134,008	–	76,306	266,597	–	–	476,911

* Includes conversion of convertible bonds into convertible preferred stock and convertible notes.

(a) Realised and unrealised gains and losses are included in net realised and change in unrealised gain/(loss) on investments, derivatives and foreign currency

transactions in the consolidated statement of operations.

8988

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

2. Fair value measurements (continued)

Changes in Level 3 assets and liabilities measured at fair value for the year ended 31 December 2021 were as follows:

	Balance beginning
	1 January 2021
		Realised gains/
		(losses)
			Change in
			Unrealised gains/
			(losses)	Purchases	Sales
						Transfers into/
						(from) Level 3*
							Ending balance 31
							December 2021
Assets (at fair value)
Investments in securities
Convertible preferred stocks	38,161,752	1,440,394	13,226,721	46,075,180	(2,331,033)	(29,395,744)	67,177,270
Common stocks	9,087,381	–	502,587	564,688	–	(8,210,689)	1,943,967
Convertible bonds	–	–	–	723,723	–	–	723,723
Total investments in securities	47,249,133	1,440,394	13,729,308	47,363,591	(2,331,033)	(37,606,433)	69,844,960
Derivative contracts
Warrants	133,983	–	1	24	–	–	134,008
Total derivative contracts	133,983	–	1	24	–	–	134,008

* Conversions of preferred stock into common stock.

Changes in Level 3 unrealised gains and losses during the year for assets still held at year end were as follows:

	2022	2021
Common stocks	(664,647)	497,966
Convertible notes	420,628	–
Convertible preferred stocks	(13,404,700)	12,873,757
Warrants	76,306	1
Change in unrealised gains and losses during the year for assets still held at year end	(13,572,413)	13,371,724

Total realised gains and losses and unrealised gains and losses in the Group’s investment in securities, derivative contracts and securities sold short

are made up of the following gain and loss elements:

	2022	2021
Realised gains	47,604,728	54,163,408
Realised losses	(41,995,983)	(14,532,072)
Net realised gain on securities, derivative contracts and securities sold short	5,608,745	39,631,336

	2022	2021
Change in unrealised gains	112,585,347	106,379,343
Change in unrealised losses	(152,339,558)	(202,558,485)
Net change in unrealised gain/(loss) on securities, derivative contracts and securities sold short	(39,754,211)	(96,179,142)

As at 31 December 2022 the Group had commitments (subject to completion of certain parameters) to certain investments totalling $2,544,486

(2021:$2,358,325).

3. Due to/from brokers

Due to/from brokers includes cash balances held with brokers and collateral on derivative transactions. Amounts due from brokers may

be restricted to the extent that they serve as deposits for securities sold short or cash posted as collateral for derivative contracts.

As at 31 December 2022, restricted cash with due from brokers totalled $22,195,456 (2021: $12,323,965). Included within due from brokers of

$5,810,750 (31 December 2021: $95,095) can be used for investment. The Group pledged cash collateral to counterparties to over-the-counter

derivative contracts of $16,384,706 (31 December 2021: $12,228,870) which is included in due from brokers.

In the normal course of business, substantially all of the Group’s securities transactions, money balances, and security positions are transacted with

the Group’s prime brokers and counterparties, Goldman Sachs & Co. LLC, Cowen Financial Products, LLC, UBS AG, Bank of America Merrill Lynch,

Morgan Stanley & Co. LLC, Jeﬀries & Co. and J.P. Morgan Securities, LLC. The Group is subject to credit risk to the extent any broker with which it

conducts business is unable to fulﬁl contractual obligations on its behalf. The Group’s management monitors the ﬁnancial condition of such brokers

and does not anticipate any losses from these counterparties.

4. Derivative contracts

In the normal course of business, the Group utilizes derivative contracts in connection with its proprietary trading activities. Investments in derivative

contracts are subject to additional risks that can result in a loss of all or part of an investment. The Group’s derivative activities and exposure to

derivative contracts are classiﬁed by the primary underlying risk, equity price risk and foreign currency exchange rate risk. In addition to its primary

underlying risk, the Group is also subject to additional counterparty risk due to the inability of its counterparties to meet the terms of their contracts.

Warrants

The Group may receive warrants from its portfolio companies upon an investment in the debt or equity of a portfolio company.

The warrants provide the Group with exposure and potential gains upon equity appreciation of the portfolio company’s share price.

The value of a warrant has two components: time value and intrinsic value. A warrant has a limited life and expires on a certain date. As time to the

expiration date of a warrant approaches, the time value of a warrant will decline. In addition, if the stock underlying the warrant declines in price, the

intrinsic value of an “in the money” warrant will decline. Further, if the price of the stock underlying the warrant does not exceed the strike price of the

warrant on the expiration date, the warrant will expire worthless. As a result, there is the potential for the Group to lose its entire investment in a warrant.

The Group is exposed to counterparty risk from the potential failure of an issuer of warrants to settle its exercised warrants. The maximum risk of

loss from counterparty risk to the Group is the fair value of the contracts and the purchase price of the warrants. The Group considers the eﬀects

of counterparty risk when determining the fair value of its investments in warrants.

Equity swap contracts

The Group is subject to equity price risk in the normal course of pursuing its investment objectives. The Group may enter into equity swap contracts

either to manage its exposure to the market or certain sectors of the market, or to create exposure to certain equities to which it is otherwise

not exposed.

Equity swap contracts involve the exchange by the Group and a counterparty of their respective commitments to pay or receive a net amount based

on the change in the fair value of a particular security or index and a speciﬁed notional amount.

9190

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

4. Derivative contracts (continued)

Volume of derivative activities

The Group considers the average month-end notional amounts during the year, categorised by primary underlying risk, to be representative of the

volume of its derivative activities during the year ended 31 December 2022:

Primary underlying risk
	2022		2021
	Long exposure	Short exposure	Long exposure	Short exposure
	Notional amounts	Notional amounts	Notional amounts	Notional amounts
Equity price
Equity swaps	48,774,292	56,273,944	2,347,607	66,149,127
Warrants
(a)
	4,024,470	–	9,031,998	–
	52,798,762	56,273,944	11,379,605	66,149,127

(a) Notional amounts presented for warrants are based on the fair value of the underlying shares as if the warrants were exercised at each respective month end date.

Impact of derivatives on the consolidated statement of assets and liabilities and consolidated statement of operations

The following tables identify the fair value amounts of derivative instruments included in the consolidated statement of assets and liabilities as

derivative contracts, categorised by primary underlying risk, at 31 December 2022 and 31 December 2021. The following table also identiﬁes the gain

and loss amounts included in the consolidated statement of operations as net realised gain/(loss) on derivative contracts and net change in unrealised

gain/(loss) on derivative contracts, categorised by primary underlying risk, for the year ended 31 December 2022 and 31 December 2021.

Primary underlying risk
		2022
	Derivative assets
		Derivative
		liabilities
			Realised gain/
			(loss)
				Change in
				unrealised gain/
				(loss)
Equity price
Equity swaps	19,086,329	8,926,743	(2,748,269)	5,894,995
Warrants	2,381,320	–	–	(1,293,427)
	21,467,649	8,926,743	(2,748,269)	4,601,568

Primary underlying risk
		2021
	Derivative assets
		Derivative
		liabilities
			Realised gain/
			(loss)
				Change in
				unrealised gain/
				(loss)
Equity price
Equity swaps	7,575,424	3,310,833	(1,651,404)	3,061,415
Warrants	3,408,150	–	2,443	(125,397)
	10,983,574	3,310,833	(1,648,961)	2,936,018

5. Securities lending agreements

The Group has entered into securities lending agreements with its prime brokers. From time to time, the prime brokers lend securities on the Group’s

behalf. As of 31 December 2022 and 31 December 2021, no securities were loaned and no collateral was received.

6. Oﬀsetting assets and liabilities

The Group is required to disclose the impact of oﬀsetting assets and liabilities represented in the consolidated statement of assets and liabilities

to enable users of the consolidated ﬁnancial statements to evaluate the eﬀect or potential eﬀect of netting arrangements on its ﬁnancial position

for recognised assets and liabilities. These recognised assets and liabilities are ﬁnancial instruments and derivative instruments that are either

subject to an enforceable master netting arrangement or similar agreement or meet the following right of setoﬀ criteria: the amounts owed by

the Group to another party are determinable, the Group has the right to oﬀset the amounts owed with the amounts owed by the other party,

the Group intends to oﬀset and the Group’s right of setoﬀ is enforceable by law.

As of 31 December 2022 and 31 December 2021, the Group held ﬁnancial instruments and derivative instruments that were eligible for oﬀset in

the consolidated statement of assets and liabilities and are subject to a master netting arrangement. The master netting arrangement allows

the counterparty to net applicable collateral held on behalf of the Group against applicable liabilities or payment obligations of the Group to the

counterparty. These arrangements also allow the counterparty to net any of its applicable liabilities or payment obligations they have to the Group

against any collateral sent to the Group.

As discussed in Note 1, the Group has elected not to oﬀset assets and liabilities in the consolidated statement of assets and liabilities. The

following table presents the potential eﬀect of netting arrangements for asset derivative contracts presented in the consolidated statement

of assets andliabilities:

Description
	Gross amounts of
	recognised assets
		Gross amounts oﬀset
		in the consolidated
		statement of assets
		and liabilities
			Gross amounts of
			recognised assets
			and liabilities
				31 December 2022
				Gross amounts not oﬀset in the
				consolidated statement of
				assets and liabilities
						Net amount
				Financial
				instruments
				(a)
					Cash collateral
					received
					(b)
Equity swaps
Bank of America Merrill Lynch	12,929,367	–	12,929,367	(3,983,939)	–	8,945,428
Cowen Financial Products, LLC	3,239,591	–	3,239,591	(1,224,200)	–	2,015,391
Morgan Stanley & Co. LLC	2,797,503	–	2,797,503	(2,797,503)	–	–
Jeﬀries & Co.	119,868	–	119,868	(119,868)	–	–
	19,086,329	–	19,086,329	(8,125,510)	–	10,960,819

Description
	Gross amounts of
	recognised assets
		Gross amounts oﬀset
		in the statement of
		assets and liabilities
			Gross
			amounts of
			recognised
			assets and
			liabilities
				31 December 2021
				Gross amounts not oﬀset in the
				statement of assets and liabilities
						Net amount
				Financial
				instruments
				(a)
					Cash collateral
					received
					(b)
Equity swaps
Cowen Financial Products, LLC	5,777,357	–	5,777,357	(1,532,754)	–	4,244,603
Bank of America Merrill Lynch	1,396,737	–	1,396,737	(1,190,091)	–	206,646
Morgan Stanley & Co. LLC	306,560	–	306,560	(77,393)	–	229,167
Jeﬀries & Co.	78,710	–	78,710	(78,710)	–	–
UBS AG	16,060	–	16,060	(16,060)	–	–
	7,575,424	–	7,575,424	(2,895,008)	–	4,680,416

(a) Amounts related to master netting agreements (e.g. ISDA), determined by the Group to be legally enforceable in the event of default and if certain other criteria

are met in accordance with applicable oﬀsetting accounting guidance but were not oﬀset due to management’s accounting policy election.

(b) Amounts related to master netting agreements and collateral agreements determined by the Group to be legally enforceable in the event of default, but certain

other criteria are not met in accordance with applicable oﬀsetting accounting guidance. The collateral amounts may exceed the related net amounts of ﬁnancial

assets and liabilities presented in the consolidated statement of assets and liabilities. If this is the case, the total amount reported is limited to the net amounts

of ﬁnancial assets and liabilities with that counterparty.

9392

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

6. Oﬀsetting assets and liabilities (continued)

The following tables present the potential eﬀect of netting arrangements for liability derivative contracts presented in the consolidated statement

of assets and liabilities as of 31 December 2022 and 31 December 2021:

Description
	Gross amounts of
	recognised
	liabilities
		Gross amounts oﬀset
		in the consolidated
		statement of assets
		and liabilities
			Gross amounts of
			recognised
			liabilities
				31 December 2022
				Gross amounts not oﬀset in the
				consolidated statement of
				assets and liabilities
						Net amount
				Financial
				instruments
				(a)
					Cash collateral
					pledged
					(b)
Equity swaps
Bank of America Merrill Lynch	3,983,939	–	3,983,939	(3,983,939)	–	–
Morgan Stanley & Co. LLC	3,372,143	–	3,372,143	(2,797,503)	(574,640)	–
Cowen Financial Products, LLC	1,224,200	–	1,224,200	(1,224,200)	–	–
Jeﬀries & Co.	336,931	–	336,931	(119,868)	(217,063)	–
UBS AG	9,530	–	9,530	–	(9,530)	–
	8,926,743	–	8,926,743	(8,125,510)	(801,233)	–

Description
	Gross amounts of
	recognised
	liabilities
		Gross amounts oﬀset
		in the statement of
		assets and liabilities
			Gross amounts of
			recognised
			liabilities
				31 December 2021
				Gross amounts not oﬀset in the
				statement of assets and liabilities
						Net amount
				Financial
				instruments
				(a)
					Cash collateral
					pledged
					(b)
Equity swaps
Cowen Financial Products, LLC	1,532,754	–	1,532,754	(1,532,754)	–	–
Bank of America Merrill Lynch	1,190,091	–	1,190,091	(1,190,091)	–	–
Jeﬀries & Co.	406,977	–	406,977	(78,710)	(328,267)	–
UBS AG	103,618	–	103,618	(16,060)	(87,558)	–
Morgan Stanley & Co. LLC	77,393	–	77,393	(77,393)	–	–
	3,310,833	–	3,310,833	(2,895,008)	(415,825)	–

(a) Amounts related to master netting agreements (e.g. ISDA), determined by the Group to be legally enforceable in the event of default and if certain other criteria

are met in accordance with applicable oﬀsetting accounting guidance but were not oﬀset due to management’s accounting policy election.

(b) Amounts related to master netting agreements and collateral agreements determined by the Group to be legally enforceable in the event of default, but certain other criteria are

not met in accordance with applicable oﬀsetting accounting guidance. The collateral amounts may exceed the related net amounts of ﬁnancial assets and liabilities presented in the

consolidated statement of assets and liabilities. If this is the case, the total amount reported is limited to the net amounts of ﬁnancial assets and liabilities with that counterparty.

7. Securities sold short

The Group is subject to certain inherent risks arising from its investing activities of selling securities short. The ultimate cost to the Group to acquire

these securities may exceed the liability reﬂected in these consolidated ﬁnancial statements.

8. Risk factors

Some underlying investments may be deemed to be highly speculative investments and are not intended as a complete investment program. The

Group is designed only for sophisticated persons who are able to bear the economic risk of the loss of their entire investment in the Group and who

have a limited need for liquidity in their investment. The following risks are applicable to the Group:

Market risk

Certain events particular to each market in which Portfolio Companies conduct operations, as well as general economic and political conditions, may

have a signiﬁcant negative impact on the operations and proﬁtability of the Group’s investments and/or on the fair value of the Group’s investments.

Such events are beyond the Group’s control, and the likelihood they may occur and the eﬀect on the Group cannot be predicted. The Group intends

to mitigate market risk generally by investing in LifeSci Companies in various geographies.

Portfolio Company products are subject to regulatory approvals and actions with new drugs, medical devices and procedures being subject to

extensive regulatory scrutiny before approval, and approvals can be revoked.

The market value of the Group’s holdings in public Portfolio Companies could be aﬀected by a number of factors, including, but not limited to: a change

in sentiment in the market regarding the public Portfolio Companies, the market’s appetite for speciﬁc asset classes; and the ﬁnancial or operational

performance of the public Portfolio Companies.

The size of investments in public Portfolio Companies or involvement in management may trigger restrictions on buying or selling securities. Laws

and regulations relating to takeovers and inside information may restrict the ability of the Group to carry out transactions, or there may be delays

or disclosure requirements before transactions can be completed.

Equity prices and returns from investing in equity markets are sensitive to various factors, including but not limited to: expectations of future

dividends and proﬁts; economic growth; exchange rates; interest rates; and inﬂation.

8. Risk factors (continued)

Biotech/healthcare companies

The Portfolio Companies are biotechnology companies. Biotech companies are generally subject to greater governmental regulation than other

industries at both the state and federal levels. Changes in governmental policies may have a material eﬀect on the demand for or costs of certain

products and services.

Any failure by a Portfolio Company to develop new technologies or to accurately evaluate the technical or commercial prospects of new technologies

could result in it failing to achieve a growth in value and this could have a material adverse eﬀect on the Group’s ﬁnancial condition.

Portfolio Companies may not successfully translate promising scientiﬁc theory into a commercially viable business opportunity. Further, the Portfolio

Companies’ therapies in development may fail clinical trials and therefore no longer be viable.

Portfolio Company products are subject to intense competition and there are many factors that will aﬀect whether the new therapies released by the

Portfolio Companies gain market share against competitors and existing therapies.

Portfolio Companies may be newer small and mid-size LifeSci Companies. These companies may be more volatile and have less experience and fewer

resources than more established companies.

Concentration risk

The Group may not make an investment or a series of investments in a Portfolio Company that result in the Group’s aggregate investment in such

Portfolio Company exceeding 15 per cent. of the Group’s gross assets, save for Rocket for which the limit is 25 per cent. as stated in the Group’s

prospectus. Each of these investment restrictions will be calculated as at the time of investment. As such, it is possible that the Group’s portfolio

may be concentrated at any given point in time, potentially with more than 15 per cent. of gross assets held in one Portfolio Company as Portfolio

Companies increase or decrease in value following such initial investment. The Group’s portfolio of investments may also lack diversiﬁcation among

LifeSci Companies and related investments.

Concentration of credit risk

In the normal course of business, the Group maintains its cash balances in ﬁnancial institutions, which at times may exceed US federal or UK insured

limits, as applicable. The Group is subject to credit risk to the extent any ﬁnancial institution with which it conducts business is unable to fulﬁl

contractual obligations on its behalf. Management monitors the ﬁnancial condition of such ﬁnancial institutions and does not anticipate any losses

from these counterparties.

Counterparty risk

The Group invests in equity swaps and takes the risk of non-performance by the other party to the contract. This risk may include credit risk of the

counterparty, the risk of settlement default, and generally, the risk of the inability of counterparties to perform with respect to transactions, whether

due to insolvency, bankruptcy or other causes.

In an eﬀort to mitigate such risks, the Group will attempt to limit its transactions to counterparties which are established, well capitalised and

creditworthy.

Liquidity risk

Liquidity risk is the risk that the Group cannot meet its ﬁnancial commitments as they fall due.The Group’s unquoted investments may have limited

or no secondary market liquidity so the Investment Manager maintains a suﬃcient balance of cash and market quoted securities which can be sold if

needed to meet its commitments.

The Group’s investments in quoted securities may also be subject to sale restrictions on listing and when the Investment Manager is subject to close

periods or privy to conﬁdential information by virtue of their active involvement in the management of portfolio companies.

Derivative transactions may not be liquid in all circumstances, such that in volatile markets it may not be possible to close out a position without

incurring a loss. The illiquidity of the derivatives markets may be due to various factors, including congestion, disorderly markets, limitations on

deliverable supplies, the participation of speculators, government regulation and intervention, and technical and operational or system failures.

Foreign exchange risk

The Group will make investments in various jurisdictions in a number of currencies and will be exposed to the risk of currency ﬂuctuations that may

materially adversely aﬀect, amongst other things, the value of the Portfolio Company or the Group’s investment in such Portfolio Company, or any

distributions received from the Portfolio Company. Under its investment policy, the Group does not intend to enter into any securities or ﬁnancially

engineered products designed to hedge portfolio exposure or mitigate portfolio risk as a core part of its investment strategy.

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

9. Share capital

During the year ended 31 December 2022 the Company did not issue any Ordinary Shares:

	2022	2021
	Number of
	Ordinary Shares
		Number of
		Ordinary Shares
As at 1 January	212,389,138	191,515,735
Issuance of Ordinary Shares	–	20,873,403
As at 31 December	212,389,138	212,389,138

Ordinary Shares carry the right to receive all income of the Company attributable to the Ordinary Shares and to participate in any distribution ofsuch

income made by the Company. Such income shall be divided pari passu among the holders of Ordinary Shares in proportion to the number of Ordinary

Shares held by them.

Ordinary Shares shall carry the right to receive notice of and attend and vote at any general meeting of the Company, and at any such meeting on a

show of hands, every holder of Ordinary Shares present in person (includes present by attorney or by proxy or, in the case of a corporate member, by duly

authorised corporate representative) and entitled to vote shall have one vote, and on a poll, subject to any special voting powers or restrictions, every

holder of Ordinary Shares present in person or by proxy shall be entitled to one vote for each Ordinary Share, or fraction of an Ordinary Share, held.

On 1 December 2022, the Performance Allocation Share held by RTW Venture Performance LP was surrendered in exchange for a New Performance

Allocation Share issued by the Subsidiary. The New Performance Allocation Share issued by the Subsidiary has identical terms to the original

Performance Allocation Share issued by the Company. From 1 December 2022, the Performance Allocation Amount will now be allocated at the

Subsidiary level, and is presented in the Group’s ﬁnancial statements as part of the Non-Controlling Interest. The sole New Performance Allocation

Share is held by RTW Venture Performance LP. As at 31 December 2022, there were no Performance Allocation Shares of the Company in issue

(31December 2021: one) and one New Performance Allocation Share of the Subsidiary in issue (31 December 2021: nil).

New Performance Allocation Shares of the Subsidiary carry the right to receive, and participate in, any dividends or other distributions of the

Subsidiary available for dividend or distribution. New Performance Allocation Shares are not entitled to receive notice of, to attend or to vote at

general meetings of the Company or the Subsidiary.

For all share classes, subject to compliance with the solvency test set out in the Companies Law, the Board may declare and pay such annual or

interim dividends and distributions as appear to be justiﬁed by the position of the Group. The Board may, in relation to any dividend or distribution,

direct that the dividend or distribution shall be satisﬁed wholly or partly by the distribution of assets, and in particular of paid-up shares or reserves

of any nature as approved by the Group.

10. Related party transactions

Management Fee

The Investment Manager receives a monthly management fee, in advance, as of the beginning of each month in an amount equal to 0.104% (1.25% per

annum) of the net assets of the Group (the “Management Fee”). For purposes of determining the Management Fee, private investments will be valued

at the fair value. The Management Fee will be prorated for any period that is less than a full month. The Management Fees charged for the year ended

31 December 2022 amounted to $3,751,464 (31 December 2021: $4,813,854) of which $nil (31 December 2021: $nil) was outstanding at the year end.

Performance Allocation

The Performance Allocation Share held by RTW Venture Performance LP was surrendered in exchange for a New Performance Allocation Share

issued by the Subsidiary. The New Performance Allocation Share issued by the Subsidiary has identical terms to the original Performance Allocation

Share issued by the Company.

In respect of each Performance Allocation Period, the Performance Allocation Amount shall be allocated at the Subsidiary level and disclosed on the

Group’s ﬁnancial statements within the Non-Controlling Interest, subject to the satisfaction of a hurdle condition.

The Performance Allocation Amount relating to the Performance Allocation Period, which is calculated solely at the Subsidiary, is an amount equal to:

((A-B) x C) x 20 per cent.

where:

A is the Adjusted Net Asset Value per Ordinary Share on the Calculation Date, adjusted by:

adding back (i) the total net Distributions (if any) per Ordinary Share (whether paid, or declared but not yet paid) during the Performance

Allocation Period; and (ii) any accrual for the Performance Allocation for the current Performance Allocation Period reﬂected in the Net Asset

Value per Ordinary Share; and deducting any accretion in the Net Asset Value per Ordinary Share resulting from either the issuance of Ordinary

Shares at a premium or the repurchase or redemption of Ordinary Shares at a discount during the Performance Allocation Period;

B is the Adjusted Net Asset Value per Ordinary Share at the start of the Performance Allocation Period; and

C is the time weighted average number of Ordinary Shares in issue during the Performance Allocation Period.

The Hurdle Amount represents an 8 per cent. annualised compounded rate of return in respect of the Adjusted Net Asset Value per Ordinary Share

from the start of the initial Performance Allocation Period through the then current Performance Allocation Period.

The Performance Allocation Share Class can elect to receive the Performance Allocation Amount in Ordinary Shares; cash; or a mixture of the two,

subject to a minimum 50% as Ordinary Shares. The Performance Allocation Share Class entered into a letter agreement dated 21 April 2020,

pursuant to which the Performance Allocation Share Class agreed to defer distributions of Ordinary Shares that would otherwise be distributed to

the Performance Allocation Share Class no later than 30 business days after the publication of the Group’s audited annual consolidated ﬁnancial

statements. Under that letter agreement, such Ordinary Shares shall be distributed to the Performance Allocation Share Class at such time or times

as determined by the Boards of Directors of the Group.

The Group will increase or decrease the amount owed to the Performance Allocation Share Class based on its investment exposure to the Group’s

performance had such Performance Ordinary Shares been so issued. The Performance Allocation Amount for the year ended 31 December 2022

includes the residual, undistributed Performance Allocation Amounts from prior years that were previously converted into a total of 14,228,208

Notional Ordinary Shares. These Notional Ordinary Shares are subject to market risk alongside the Ordinary Shares and incurred a mark to market

loss of $2,476,036 in 2022 (2021: notional loss of $3,559,670), which is included in Performance Allocation within the Consolidated Statement of

Changes in Net Assets. There was no reallocation of uncrystallized performance allocation back to Ordinary Shareholders related to the Group’s

performance in the period.

Until the Group makes a distribution of Ordinary Shares to the Performance Allocation Share Class, the Group will have an unsecured discretionary

obligation to make such distribution at such time or times as the Board of Directors of the Group determines. RTW Venture Performance LP has

agreed to the deferral of the distributions of the Subsidiary’s Ordinary Shares in connection with its own tax planning. The Group does not believe that

the deferral of such distributions to the Performance Allocation Share Class will have any negative eﬀects on holders of the Company’s Ordinary Shares.

9796

Strategic Report Governance Report Financial Statements Additional Information

Consolidated Financial Statements

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2022

(Expressed in United States Dollars)

10. Related party transactions (continued)

The Investment Manager is a member of the Performance Allocation Share Class and will therefore receive a proportion of the Performance Allocation

Amount. For the year ended 31 December 2022, the Board did not approve a cash distribution to the Performance Allocation Share Class (31 December

2021: $4,974,920). At the year end the Performance Allocation Share Class of the Subsidiary is reﬂected within the Non-Controlling Interest balance of

$21,844,468 and was captured within the Performance Allocation Share Class of the Company at 31 December 2021 with a balance of $24,320,504.

The Investment Manager is also refunded any research costs incurred on behalf of the Group.

One of the Directors of the Group, Stephanie Sirota, is also a partner and the Chief Business Oﬃcer of the Investment Manager. The following table

represents the number of related parties served on the boards of directors of investments held by the Group during the year ended 31 December

2022 and 31 December 2021:

Investments	Partners	Employees
Rocket	Two
	(a)
		One
HSAC2 Holdings II	Two
	(a)
		One
Ji Xing	Two
	(a)
		One
Yarrow Biotechnology	Two
	(b)
		One

(a) Roderick Wong, Naveen Yalamanchi

(b) Roderick Wong, Peter Fong

As at 31 December 2022, the number of Ordinary Shares held by each Director was as follows:

	2022	2021
	Number of
	Ordinary Shares
		Number of
		Ordinary Shares
William Simpson	200,000	150,000
Paul Le Page	128,000	103,000
William Scott	305,003	150,000
Stephanie Sirota	1,010,000	1,000,000

All Directors added to their holdings during the year by purchasing Ordinary Shares in the secondary market.

Roderick Wong is a major shareholder and also a member of the Investment Manager. As at 31 December 2022, he held 29,593,872 Ordinary Shares

in the Group (13.93% of the Ordinary Shares in issue) (31 December 2021: 29,218,773, 13.76% of the Ordinary Shares in issue).

The total Directors’ fees expense for the year amounted to $176,722 (31 December 2021: $214,353) of which $48,281 was outstanding at 31 December

2022 (31 December 2021: $52,761) and is included within accrued expenses.

All of the Directors of the Company were also appointed as directors of the Subsidiary on its incorporation on 23 November 2022.

11. Administrative services

Elysium Fund Management Limited (“EFML”) serves as Administrator to the Group, providing administration, corporate secretarial, corporate

governance and compliance services. Morgan Stanley Fund Services USA LLC (“MSFS”) serves as the Group’s Sub-Administrator.

During the year ended 31 December 2022, EFML and MSFS charged administration fees of $93,469 and $218,534 respectively (31 December 2021:

EFML charged $107,767 and MSFS charged $223,067) of which $6,484 and $91,099 (31 December 2021: EFML $8,396, MSFS $76,053) was outstanding

at 31 December 2022, and is included within accrued expenses.

12. Financial highlights

Financial highlights for the year ended 31 December 2022 and 31 December 2021 are as follows:

	2022	2021
Per Ordinary Share operating performance
Net Asset Value, beginning of year	$ 1.71	$ 1.96
Issuance of Ordinary Shares	–	0.02
Income from investments
Net investment income/(loss)	(0.02)	(0.04)
Net realised and unrealised gain/(loss) on investments, derivatives and foreign currency transactions	(0.15)	(0.23)
Total from investment operations	(0.17)	(0.27)
Net Asset Value, end of year	$ 1.54	$ 1.71
Total return
Total return before Performance Allocation	(10.18)%	(15.35)%
Performance Allocation (excluding mark to market)	- %	2.58 %
Total return after Performance Allocation	(10.18)%	(12.77)%
Ratios to average net assets*
Expenses	2.47%	2.22 %
Performance Allocation	(1.44)%	(2.11)%
Expenses and Performance Allocation	1.03%	0.11 %
Net investment income/(loss)	(1.75)%	(2.04)%
NAV total return for the year	(10.18)%	(15.35)%

* Ratios are not annualised.

Financial highlights are calculated for Ordinary Shares. An individual shareholder’s ﬁnancial highlights may vary based on participation in new issues,

diﬀerent Performance Allocation arrangements, and the timing of capital share transactions. Net investment income/loss does not reﬂect the eﬀects

of the Performance Allocation.

13. Subsequent events

These consolidated ﬁnancial statements were approved by the Board of Directors on 30 March 2023. Subsequent events have been evaluated through

this date.

Strategic Report Governance Report Financial Statements Additional Information

General Company Information

Investment Objective

and Investment Policy

The Company

RTW Venture Fund Limited is a company that was incorporated

as a limited liability corporation in the State of Delaware, United

States of America on 16 February 2017, with the name “RTW

Special Purpose Fund I, LLC”, and re-domiciled into Guernsey

under the Companies Law on 2 October 2019 with registration

number 66847 on the Guernsey Register ofCompanies.

The Company is registered with the GFSC as a Registered

Closed-ended Collective Investment Scheme and is an

investment company limited by shares. The registered oﬃce

of the Company is 1st Floor, Royal Chambers, St Julian’s

Avenue, St Peter Port, Guernsey, GY1 3JX.

On 30 October 2019, the issued Ordinary Shares of the

Company were listed and admitted to trading on the

Specialist Fund Segment of the Main Market of the London

Stock Exchange. The ISIN of the Company’s Ordinary Shares

is GG00BKTRRM22 and trades under the ticker symbol

“RTW” and “RTWG”.

The Company’s Ordinary Shares were admitted to trading

on the Premium Segment of the London Stock Exchange

with eﬀect from 6 August 2021.

The Subsidiary

On 1 December 2022 the Company changed its status for

U.S. federal tax purposes from a “publicly traded partnership”

or “PTP” to a corporation. The change in status caused it to

be treated as a “passive foreign investment company” or a

“PFIC.” This change was necessitated by recent changes to

U.S. tax legislation that came into eﬀect on 1 January 2023.

Related to the making of the tax election, the Company carried

out a reorganisation of the arrangements pursuant to which an

aﬃliate of the Investment Manager is allocated its share of the

investment performance generated by the Company. Pursuant

to this, the Company established a new wholly-owned subsidiary

incorporated in Guernsey, RTW Venture Fund Operating

Limited, to which it has transferred its right to the proﬁts and

losses attributable to the Company’s portfolio of assets. The

Directors of the Subsidiary are the same as the Directors of

the Company. This reorganisation had no economic impact on

shareholders and was eﬀected solely for the purpose of ensuring

that the share of the investment performance generated by the

Company which is allocable to an aﬃliate of the Investment

Manager receives the same treatment for U.S. federal tax

purposes as would have been the case if no tax election by the

Company had been compelled by the change in U.S. tax law.

As part of the reorganisation, the Investment Management

Agreement was amended to provide services to the Subsidiary.

There was no change to the investment management fee, but

the Performance Allocation Share held by RTW Venture

Performance LP was surrendered in exchange for a New

Performance Allocation Share issued by the Subsidiary. The

New Performance Allocation Share issued by the Subsidiary

has identical terms to the original Performance Allocation

Share issued by the Company.

Investment Objective

The Group seeks to achieve positive absolute performance

and superior long-term capital appreciation, with a focus on

forming, building, and supporting world-class life sciences,

biopharmaceutical and medical technology companies. It

intends to create a diversiﬁed portfolio of investments

across a range of businesses, each pursuing the development

of superior pharmacological or medical therapeutic assets to

enhance the quality of life and/or extend patient life.

Investment Policy

The Group seeks to achieve its investment objective by

leveraging the Investment Manager’s data-driven proprietary

pipeline of innovative assets to invest in life sciences companies:

• across various geographies (globally);

• across various therapeutic categories and product types

(including but not limited to genetic medicines, biologics,

traditional modalities such as small molecule

pharmaceuticals and antibodies, and medical devices);

• in both a passive and active capacity and intends, from

time to time, to take a controlling or majority position

with active involvement in a Portfolio Company to assist

and inﬂuence its management. In those situations, it is

expected that the Investment Manager’s senior executives

may serve in temporary executive capacities; and

• by participation in opportunities created by the

Investment Manager’s formation of companies de novo

when a signiﬁcant unmet need has been identiﬁed and the

Group is able to build a diﬀerentiated, sustainable business

to address said unmet need.

The Group expects to invest approximately 80% of its gross

in the biopharmaceutical sector and approximately 20% of its

gross assets in the medical technology sector.

The Group’s portfolio will reﬂect its view of the most compelling

opportunities available to the Investment Manager, with an

initial investment in each privately held Portfolio Company

(“Private Portfolio Company”) expected to start in a low single

digit per cent. of the Group’s gross assets and grow over time,

as the Group may, if applicable, participate in follow-on

investments and/or continue holding the Portfolio Company

as it becomes publicly-traded. It is intended certain long-term

holds will increase in size and may represent between ﬁve and

ten per cent. or greater of the Group’s gross assets.

The Group anticipates deploying one-third of its capital

toward early-stage and de novo company formations

(including newly formed entities around early-stage

academic licenses and commercial stage corporate assets)

and two-thirds of its capital in mid- to late-stage ventures.

The Group may choose to invest in Portfolio Companies listed

on a public stock exchange (“Public Portfolio Companies”)

depending on market conditions and the availability of

appropriate investment opportunities. Equally, as part of a

full-life cycle investment approach, it is expected that Private

Portfolio Companies may later become Public Portfolio

Additional

Information

04 // ADDITIONAL INFORMATION

101 General Company Information –

Investment Objective and Investment Policy

103 Glossary

107 Alternative Performance Measures

108 AIFMD Disclosures

109 Schedule of Key Service Providers

Anticipated

capital toward

early-stage and

de novo company

formations

1/3

(2021: 1/3)

101

Strategic Report Governance Report Financial Statements Additional Information

100

General Company Information

– Investment Objective and Investment Policy

continued

Companies. Monetisation events such as IPOs and reverse

mergers will not necessarily represent exit opportunities for

the Group. Rather, the Group may decide to retain all or some

of its investment in such Portfolio Companies or the acquiring

Company where they meet the standard of diligence set by the

Investment Manager. The Group is not required to allocate a

speciﬁc percentage of its assets to Private Portfolio

Companies or Public Portfolio Companies.

The Group also intends, where appropriate, to invest further

in its Portfolio Companies, supporting existing investments

throughout their life cycle. The Group may divest its interest

in Portfolio Companies in part or in full when the risk–reward

trade-oﬀ is deemed to be less favourable.

From time to time, the Group may seek opportunities to

optimise investing conditions, and to allow for such

circumstances, the Group will have the ability to hedge or enter

into securities or derivative structures in order to enhance the

risk-reward position of the portfolio and its underlying securities.

Investment restrictions

The Group will be subject to the following restrictions when

making investments in accordance with its investment policy:

• the Group may not make an investment or a series of

investments in a Portfolio Company that result in the

Group’s aggregate investment in such Portfolio Company

exceeding 15% (or, in the case of Rocket Pharmaceuticals,

Inc., 25%) of the Group’s gross assets at the time of each

such investment;

• the Group may not make any direct investment in any

tobacco company and not knowingly make or continue to

hold any Public Portfolio Company investments that would

result in exposure to tobacco companies exceeding one

per cent. of the aggregate value of the Public Portfolio

Companies from time to time.

Each of these investment restrictions will be calculated as

at the time of investment. In the event that any of the above

limits are breached at any point after the relevant investment

has been made (for instance, upon successful realisation of

economic and/or scientiﬁc milestones or as a result of any

movements in the value of the Group’s gross assets), there

will be no requirement to sell or otherwise dispose of any

investment (in whole or in part).

Leverage and borrowing limits

The Group may use conservative leverage in the future in

order to enhance returns and maximise the growth of its

portfolio, as well as for working capital purposes, up to a

maximum of 50% of the Group’s net asset value at the time

of incurrence. Any other decision to incur indebtedness may

be taken by the Investment Manager for reasons and within

such parameters as are approved by the Board. There are

no limitations placed on indebtedness incurred in the Group’s

underlying investments.

Capital deployment

The Group anticipates that it will initially, upon Admission

and upon any subsequent capital raises, invest up to 80% of

available cash in Public Portfolio Companies that have been

diligenced by the Investment Manager and represent holdings

in other portfolios managed by the Investment Manager,

subsequently rebalancing the portfolio between Public

Portfolio Companies and Private Portfolio Companies as

opportunities to invest in the latter become available.

Cash management

The Group’s uninvested capital may be invested in cash

instruments or bank deposits pending investment in Portfolio

Companies or used for working capital purposes.

Hedging

As described above, the Group may seek opportunities

to optimise investing conditions, and to allow for such

circumstances, there will be no limitations placed on the

Group’s ability to hedge or enter into securities or derivative

structures in order to enhance the risk-reward position of the

portfolio and its underlying securities.

On an ongoing basis, the Group does not intend to enter into

any securities or ﬁnancially engineered products designed to

hedge portfolio exposure or mitigate portfolio risk as a core

part of its investment strategy, but may enter into hedging

transactions to hedge individual positions or reduce volatility

related to speciﬁc risks such as ﬂuctuations in foreign

exchange rates, interest rates, and other market forces.

Deﬁned Terms

“Adjusted Net Asset Value” the NAV adjusted by deducting the unrealised gains and unrealised losses in respect of private Portfolio Companies;

“Administrator” means Elysium Fund Management Limited;

“AIC” the Association of Investment Companies;

“AIC Code” the AIC Code of Corporate Governance dated February 2019;

“AIFM” means Alternative Investment Fund Manager;

“AIFMD” the Alternative Investment Fund Managers Directive;

“Alcyone” Alcyone Therapeutics, Inc.;

“Ancora” Ancora Heart, Inc.;

“Annual General Meeting”

or “AGM”

the annual general meeting of the shareholders of the Company;

“Annual Report” the Annual Report and audited consolidated ﬁnancial statements;

“Antibody” a large Y-shaped blood protein that can stick to the surface of a virus, bacteria, or receptor on a cell;

“Antibody-Oligonucleotide

Conjugates” or “AOC”

molecules that combine structures of an antibody and an oligo;

“Artios” Artios Pharma, Inc.;

“Artiva” Artiva Biotherapeutics, Inc.;

“Athira” Athira Pharma, Inc.;

“Autoimmune diseases” conditions, where the immune system mistakenly attacks a body tissue;

“Avidity” Avidity Biosciences, Inc.;

“Beta Bionics” Beta Bionics, Inc.;

“Biomea” Biomea Fusion, Inc.;

“C4 Therapeutics” or

“C4T”

C4 Therapeutics, Inc.;

“Calculation Date” 31 December or, if such date is not a business day, the previous business day;

“Cardiovascular disease” conditions aﬀecting heart and vascular system;

“CinCor” CinCor Pharma, Inc.;

“Clinical stage” or “clinical

trial”

a therapy in development goes through a number of clinical trials to ensure its safety and eﬃcacy. The trials in

human subjects range from Phase 1 to Phase 3. All studies done prior to clinical testing in human subjects are

considered preclinical;

“CNS” Central Nervous System

“Companies Law” the Companies (Guernsey) Law, 2008 (as amended);

“Company” or “RTW

Venture Fund Limited”

RTW Venture Fund Limited is a company incorporated in and controlled from Guernsey as a close-ended Investment

Company. The Company has an unlimited life and is registered with the GFSC as a Registered Closed-ended

Collective Investment Scheme. The registered oﬃce of the Company is 1st Floor, Royal Chambers, St Julian’s

Avenue, St Peter Port, Guernsey, GY1 3JX;

“Company’s Articles” means the Company’s Articles of Incorporation;

“Core portfolio companies” Include private companies and public companies that were initially added to our portfolio as private investments;

“Corporate Brokers” being J.P. Morgan Cazenove and Bank of America;

“Crohn’s Disease” a condition, in which a part(s) of digestive tract is inﬂamed;

“CRS” Common Reporting Standard;

“Danon Disease” a rare genetic heart condition in children, predominantly boys;

“Directors” or “Board” the directors of the Company as at the date of this document, or who served during the reporting period,

and “Director” means any one of them;

“DTR” Disclosure Guidance and Transparency Rules of the UK’s FCA;

“Encoded” Encoded Therapeutics, Inc.;

“EU” or “European Union” the European Union ﬁrst established by the treaty made at Maastricht on 7 February 1992;

“Fanconi Anemia” a rare genetic blood condition in young children;

“FATCA” the Foreign Account Tax Compliance Act;

“FCA” the Financial Conduct Authority;

“FCA Rules” the rules or regulations issued or promulgated by the FCA from time to time and for the time being in force

(as varied by any waiver or modiﬁcation granted, or guidance given, by the FCA);

“FDA” the US Food and Drug Administration;

“FRC” the Financial Reporting Council;

Glossary

103102

Strategic Report Governance Report Financial Statements Additional Information

Glossary

continued

“Frequency” Frequency Therapeutics, Inc.;

“FTC” the Federal Trade Commission;

“Gene therapy” a biotechnology that uses gene delivery systems to treat or prevent a disease;

“Genetic Medicine” an approach to treat or prevent a disease using gene therapy or RNA medicines;

“GFSC” the Guernsey Financial Services Commission;

“GFSC Code” the GFSC Finance Sector Code of Corporate Governance as amended in June 2021;

“GH Research” GH Research PLC;

“Group” the Company and the Subsidiary;

“HCM” or “Hypertrophic

cardiomyopathy”

a cardiovascular disease characterised by an abnormally thick heart muscle;

“ImmTAC®” bi-speciﬁc biologic molecules designed to ﬁght cancer or viral infections;

“Immunocore” Immunocore Limited;

“InBrace” InBrace or Swift Health, Inc.;

“Independent Valuer” Alvarez & Marsal Valuation Services, LLC;

“Infantile Malignant

Osteopetrosis” or “IMO”

a rare genetic bone disease in young children, manifesting in an increased bone density;

“Interim Report” the Interim Financial Report;

“Investigational New Drug”

or “IND”

the FDA’s investigational New Drug program is the means by which a pharmaceutical company obtains permission

to start human clinical trials;

“Investment Manager” RTW Investments, LP, also referred to as RTW;

“IPEV Guidelines” the International Private Equity and Venture Capital Valuation Guidelines;

“IPO” an initial public oﬀering;

“IRR” internal rate of return;

“ISDA” International Swaps and Derivatives Association;

“iTe o s” iTeos Therapeutics, Inc.;

“Ji Xing” Ji Xing Pharmaceuticals, formerly China New Co;

“Kyverna” Kyverna Therapeutics, Inc.;

“Landos” Landos Biopharma, Inc.;

“Lentiviral vector or “LVV” based gene therapy - a type of viral vector used to deliver a gene;

“Leukocyte adhesion

deﬁciency” or “LAD-I”

a rare genetic disorder of immunodeﬁciency in young children;

“LifeSci Companies” companies operating in the life sciences, biopharmaceutical, or medical technology industries;

“Listing Rules” the listing rules made under section 73A of the Financial Services and Markets Act 2000

(as set out in the FCA Handbook), as amended;

“London Stock Exchange”

or “LSE”

London Stock Exchange plc;

“LSE” London Stock Exchange’s main market for listed securities;

“Lycia” Lycia Therapeutics, Inc.;

“MAGE-A4” a protein expressed on certain types of tumours;

“Magnolia Medical” or

“Magnolia”

Magnolia Medical Technologies, Inc.;

“Medtech” medical technology sector within healthcare;

“Menin” a target for the treatment development in oncology;

“Milestone” Milestone Pharmaceuticals, Inc.;

“MOC” Multiple on capital is the ratio of realised and unrealised gains divided by the acquisition cost of an investment;

“Monte Rosa” Monte Rosa Therapeutics, Inc.;

“Myotonic Dystrophy” a genetic condition that aﬀects muscle function;

“NASDAQ Biotech” a stock market index made up of securities of NASDAQ-listed companies classiﬁed according to the Industry

Classiﬁcation Benchmark as either the Biotechnology or the Pharmaceutical industry;

“Net Asset Value” or “NAV” the value of the assets of the Company less its liabilities, calculated in accordance with the valuation guidelines laid

down by the Board;

“Neurogastrx” Neurogastrx, Inc.;

“New Performance

Allocation Shares”

performance allocation shares of no-par value in the capital of the Subsidiary;

“NewCo” a new company;

“NiKang” Nikang Therapeutics, Inc;

“Non-core portfolio assets” investments made in public companies as a part of cash management strategy;

“Notional Ordinary Shares” Performance Ordinary Shares, in which receipt of such shares has been deferred;

“Nuance” Nuance Pharma;

“Numab” Numab Therapeutics, Inc.;

“Oﬃcial List” the oﬃcial list of the UK Listing Authority;

“Oligonucleotides” or

“Oligos”

short DNA or RNA molecules that have a wide range of applications in genetic testing and research;

“Oncology” a therapeutic area focused on diagnosis, prevention and treatment of cancer;

“OpCo” or “Subsidiary” RTW Venture Fund Operating Limited;

“Ophthalmic conditions” conditions aﬀecting the eye;

“Orchestra BioMed” or

“Orchestra”

Orchestra BioMed, Inc.:

“Ordinary Shares” the Ordinary Shares of the Company;

“Performance Allocation

Amount”

an allocation connected with the performance of the Company to be allocated to the Performance Allocation

Share Class in such amounts and as such times as shall be determined by the Board;

“Performance Allocation

Period”

each period ending on a Calculation Date and beginning on the business day immediately following the last

Performance Allocation Period in respect of which a Performance Allocation has been allocated;

“Performance Allocation

Share Class”

a class fund for the Performance Allocation Shares or New Performance Allocation Shares to which the

Performance Allocation will be allocated;

“Performance Allocation

Shares”

performance allocation shares of no-par value in the capital of the Company (prior to the 1 December 2022

reorganisation), or performance allocation shares of no-par value in the capital of the Subsidiary (with eﬀect

from the 1 December 2022 reorganisation);

“Performance Allocation

Shareholder”

the holder of Performance Allocation Shares or New Performance Allocation Shares;

“PFIC” Passive Foreign Investment Company;

“Pilot study” a small-scale study;

“Private Investment in

Public Equity” or “PIPE”

is when an institutional or an accreditedinvestorbuys stock directly from a public company below market price;

“POI Law” The Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended;

“Portfolio Companies” Private and public companies included into the portfolio;

“PRAME” a cancer-testis antigen (CTA) that is highly expressed in a broad range of solid and hematologic malignancies;

“Premium Segment” Premium Segment of the Main Market of the LSE;

“PRIority MEdicines” or

“PRIME”

to be accepted for PRIME, a medicine has to show its potential to beneﬁt patients with unmet medical needs based

on early clinical data;

“Prometheus” Prometheus Biosciences, Inc.;

“Prospectus” the prospectus of the Company, most recently updated on 14 October 2019 and available on the Company’s website

(www.rtwfunds.com/venture-fund);

“PTP” Publicly Traded Partnership;

“Pulmonary conditions” pathologic conditions that aﬀect lungs;

“Pulmonx” Pulmonx Corporation;

“Pyruvate Kinase

Deﬁciency” or “PKD”

a rare genetic disorder aﬀecting red blood cells;

“Pyxis” Pyxis Oncology, Inc.;

“Rare disease” a disease that aﬀects a small percentage of the population;

“Registrar” Link Market Services (Guernsey) Limited;

“RNA medicines” a type of biotechnology that uses RNA to treat a disease;

“Rocket Pharmaceuticals”

or “Rocket”

Rocket Pharmaceuticals, Inc.;

“RTW” RTW Investments, LP, also referred to as the Investment Manager;

“RTWCF” RTW Charitable Foundation;

“RTW Royalty” RTW Royalty Holding Company #1 and #2;

“Russell 2000 Biotech” a stock index of small cap biotechnology and pharmaceutical companies;

105104

Strategic Report Governance Report Financial Statements Additional Information

Glossary

continued

“SEC Rule 144” selling restricted and control securities;

“Seed Assets” the initial portfolio of the Company, consisting of: Beta Bionics, Frequency, Immunocore, Landos, Orchestra BioMed

and Rocket;

“SFS” Specialist Fund Segment of the London Stock Exchange;

“Small molecule” a compound that can regulate a biologic activity;

“Sensorineural hearing

loss”

a type of hearing loss caused by damage to the inner ear;

“SPAC” Special Purpose Acquisition Company;

“Sub-Administrator” Morgan Stanley Fund Services USA LLC;

“Subsidiary” or “OpCo” RTW Venture Fund Operating Limited;

“Tachycardia” a heart rhythm disorder;

“Tars u s” Tarsus, Inc.;

“Tenaya” Tenaya Therapeutics. Inc.;

“TIGIT” a target for a checkpoint antibody development in immune-oncology;

“TL1A” a target for the treatment of inﬂammation associated with inﬂammatory bowel disease (IBD);

“Type 1 Diabetes” or “TD1” a type of insulin resistance;

“Total shareholder return” a measure of shareholders’ investment in a company with reference to movements in share price and dividends paid

over time;

“UK” United Kingdom;

“UK Code” the UK Corporate Governance Code 2018 published by the Financial Reporting Council in July 2018;

“UK-Guernsey IGA” The UK-Guernsey Intergovernmental Agreement for the Automatic Exchange of Information;

“Ulcerative Colitis” an inﬂammatory bowel disease that causes sores in the digestive tract;

“Umoja” Umoja Biopharma. Inc.;

“US” the United States of America;

“US GAAP” US Generally Accepted Accounting Principles;

“Uveal melanoma” a type of eye cancer;

“Valuation Committee” Valuation Committee of the Investment Manager;

“Ventyx” Ventyx Biosciences, Inc.;

“Visus” Visus Therapeutics, Inc.;

“WACC” weighted average cost of capital;

“XIRR” an internal rate of return calculated using irregular time intervals.

“Yarrow” Yarrow Biotechnology, Inc.

APM Deﬁnition Purpose Calculation

Available Cash Cash held by the Group’s Bankers,

Prime Broker and an ISDA

counterparty.

A measure of the Group’s

liquidity, working capital

and investment level.

Cash and cash equivalents, Due from brokers less Due

to brokers on the Statement of Assets & Liabilities.

NAV per Ordinary

The Company's NAV divided by the

number of Ordinary Shares.

A measure of the value of one

Ordinary Share.

The net assets attributable to ordinary shares on the

statement of ﬁnancial position (US$326.1 million) divided by

the number of Ordinary Shares in issue (212,389,138) as at

the calculation date.

Price per share The Company’s closing share price

on the London Stock Exchange for

a speciﬁed date.

A measure of the supply and

demand for the Company’s shares.

Extracted from the oﬃcial list of the London Stock

Exchange.

NAV Growth The percentage increase/decrease in

the NAV per Ordinary share during

the reporting period.

A key measure of the success of the

Investment Manager’s investment

strategy.

The quotient of the NAV per share at the end of the period

(US$1.54) and the NAV per share at the beginning of the

period (US$1.71) minus one expressed as a percentage.

Share price growth/

Total Shareholder

Return

The percentage increase(decrease)

in the price per share during the

reporting period.

A measure of the return that could

have been obtained by holding a

share over the reporting period.

The quotient of the price per share at the end of the period

(US$1.21) and the price per share at the beginning of the

period (US$1.78) minus 1.00 expressed as a percentage.

The measure excludes transaction costs.

Share Price

Premium (Discount)

The amount by which the ordinary

share price is higher/lower than the

NAV per ordinary share, expressed

as a percentage of the NAV per

ordinary share.

A key measure of supply and

demand for the Company’s shares.

A premium implies excess demand

versus supply and vice versa.

The quotient of the price per share at the end of the period

(US$1.21) and the NAV per share at the end of the period

(US$1.54) minus one expressed as a percentage.

Multiple on Invested

Capital (MOIC or

MOC)

The multiple that measures value

that an investment has generated.

A measure to evaluate performance

of the realised and unrealised

investments.

The ratio between initial capital invested in a portfolio

company and current (as of 31 December 2022) value of the

investment. It is a gross metric and calculation is performed

before fees and incentive.

Extended Internal

Rate of Return

(XIRR)

The percentage or single rate

of return when applied to all

transactions in a portfolio company.

A measure of return which is used

when multiple investments have been

made over time into a portfolio

company.

The rate also expressed as a percentage that calculates

the returns on the total investment made with increments

through a given period (from initial investment date to 31

December 2022).

Ongoing charges

ratio

The recurring costs that the Group

has incurred during the period

excluding performance fees and one

oﬀ legal and professional fees

expressed as a percentage of the

Group’s average NAV for the period.

A measure of the minimum gross

proﬁt that the Company needs to

produce to make a positive return

for shareholders.

Calculated in accordance with the AIC methodology detailed

on the web link below: https://www.theaic.co.uk/sites/default/

ﬁles/documents/AICOngoingChargesCalculationMay12.pdf

Ongoing Charges

2022

US$

2021

US$

Fees to Investment Manager 3,751,464 4,813,854

Legal and professional fees 1,008,629 1,070,317

Audit fees 329,557 288,254

Administration fees 312,003 330,834

Directors’ remuneration 176,722 214,353

Other expenses 1,100,167 584,851

Listing fees – 936,615

Total expenses 6,678,542 8,239,078

Non-recurring expenses (487,786) (1,176,627)

Total ongoing expenses 6,190,756 7,062,451

Average NAV 322,418,512 408,929,032

Annualised ongoing charges (using AIC methodology) 1.92% 1.73%

Alternative Performance Measures (unaudited)

107106

Strategic Report Governance Report Financial Statements Additional Information

AIFMD Disclosures unaudited

Report on remuneration and quantitative remuneration disclosure

Under the Alternative Investment Fund Managers Directive (‘AIFMD’), we are required to make disclosures relating to remuneration of staﬀ working

for the Investment Manager for the year to 31 December 2022.

Amount of remuneration paid

The Investment Manager paid the following remuneration to staﬀ in respect of the ﬁnancial year ending on 31 December 2022 in relation to work

on the Company.

2022

US$’000

2021

US$’000

Fixed remuneration 771 590

Variable remuneration 1,010 1,004

Total remuneration 1,780 1,594

Number of beneﬁciaries 76 56

The amount of the aggregate remuneration paid (or to be paid) by the Investment Manager to its partners which has been attributed to the Company

in respect of the ﬁnancial year ending on 31 December 2022 was US$26.8 million (2021: US$33.6 million). The amount of the total remuneration paid by

the Investment Manager to members of its staﬀ whose actions have a material impact on the risk proﬁle of the Company which has been attributed to

the Company in respect of ﬁnancial year ending on 31 December 2022 was US$23.6 million (2021: US$29.6 million).

Leverage

The Company may employ leverage and borrow cash, up to a maximum of 50 per cent. of the NAV at the time of incurrence, in accordance with its

stated investment policy. The use of borrowings and leverage has attendant risks and can, in certain circumstances, substantially increase the

adverse impact to which the Company’s investment portfolio may be subject. For the purposes of this disclosure, leverage is any method by which the

Company’s exposure is increased, whether through borrowing of cash or securities, or leverage embedded in foreign exchange forward contracts or

by any other means. AIFMD requires that each leverage ratio be expressed as the ratio between a Company’s exposure and its net asset value, and

prescribes two required methodologies, the gross methodology and the commitment methodology (as set out in AIFMD Level 2 Implementation

Guidance), for calculating such exposure. Using the methodologies prescribed under AIFMD, the leverage of the Company is detailed in the table below:

Commitment leverage as at

31 December

Gross leverage as at

31 December

2022 2021 2022 2021

Leverage ratio 134% 129% 139% 129%

Other risk disclosures

The risk disclosures relating to risk framework and risk proﬁle of the Company are set out in Note 8 to the consolidated ﬁnancial statements

on pages92 to 93 and the principal and emerging risks and uncertainties on pages 34 to 36

Pre-investment disclosures

AIFMD requires certain information to be made available to investors in an Alternative Investment Fund (‘AIF’) before they invest and requires that

material changes to this information be disclosed in the Annual Report of the AIF. There have been no material changes (other than those reﬂected

in these consolidated ﬁnancial statements) to this information requiring disclosure.

Board of Directors

William Simpson (Chairman)

Paul Le Page (Chairman of Audit Committee)

William Scott

Stephanie Sirota

Investment Manager and AIFM

RTW Investments, LP

40 10th Avenue

Floor 7

New York

NY 10014

United States of America

Registered oﬃce

1st Floor, Royal Chambers

St Julian’s Avenue

St Peter Port

Guernsey

GY1 3JX

Administrator and Company Secretary

Elysium Fund Management Limited

1st Floor, Royal Chambers

St Julian’s Avenue

St Peter Port

Guernsey

GY1 3JX

Sub-Administrator

Morgan Stanley Fund Services USA LLC

2000 Westchester Avenue, 1st Floor

Purchase

NY 10577

United States of America

Independent Valuer

Alvarez & Marsal Valuation Services LLC

600 Madison Avenue

8th Floor

New York

NY 10022

United States of America

Guernsey Advocates to the Company

Carey Olsen (Guernsey) LLP

Carey House

Les Banques

St Peter Port

Guernsey

GY1 4BZ

UK Legal Advisers to the Company

Herbert Smith Freehills LLP

Exchange House

Primrose Street

London

EC2A 2EG

Corporate Brokers and Financial Advisers

Merrill Lynch International (BofA Securities)*

2 King Edward Street

London

EC1A 1HQ

J.P. Morgan Cazenove

25 Bank Street

Canary Wharf

London

E14 5JP

Registrar

Link Market Services (Guernsey) Limited

Mont Crevelt House

Bulwer Avenue

St Sampson

Guernsey

GY2 4LH

Independent Auditor

KPMG Channel Islands Limited

Glategny Court

Glategny Esplanade

St Peter Port

Guernsey

GY1 1WR

Principal Bankers

Barclays Bank PLC, Guernsey Branch

Le Marchant House

Le Truchot

St Peter Port

Guernsey

GY1 3BE

Prime Broker

Goldman Sachs & Co. LLC

200 West Street

29th Floor

New York

NY 10282

United States of America

Identiﬁers:

ISIN: GG00BKTRRM22

SEDOL: BKTRRM2 / BNNXVW5

Ticker: RTW / RTWG

LEI: 549300Q7EXQQH6KF7Z84

www.rtwfunds.com/venture-fund

* on 11 February 2022, Merrill Lynch International

(BofA Securities) was appointed as a corporate

broker and ﬁnancial adviser to the Company.

Schedule of Key Service Providers

109108

Strategic Report Governance Report Financial Statements Additional Information

rtwfunds.com

Find more information at:

rtwfunds.com/rtw-venture-fund-ltd

rtwventurefund@rtwfunds.com

RTW Investments, LP

40 10th Avenue, Floor 7

New York, NY 10014

(646) 597-6980