John McLaren: Why I'm still a petrolhead

Reducing emissions, the investors banking on Brexit and why there's life in biotech shares.

by John McLaren
Last Updated: 15 Apr 2016

If you like cars – and I do – it is nice to combine pleasure with business. Having recently become chairman of Eagle E-Types, it was a thrill to be at the March launch of the Spyder GT, the latest of Eagle’s ‘reimagined’ editions, which began with the Speedster, a car so gorgeous that even Jeremy Clarkson ran clean out of hyperbole.   

I enjoy, too, being on the board of Torotrak, which develops mechanical solutions for reducing emissions, and which is radar-locked onto the ramifications of Dieselgate. It seems VW felt they had to cheat because, apart from fitting Heath Robinson urea tanks to trap the crap, they had exhausted economically viable ideas for reducing emissions from what is an inherently (ob)NOx-ious fuel. The contrast with gasoline is stark – the team at Torotrak estimates that petrol-engined cars can be made close to 40% more efficient at a relatively modest cost per vehicle. If that happened, old-fangled petrol vehicles could become kinder to the environment than electric equivalents.

Chatting with a grand fromage at Mercedes-Benz about their expectations for the Formula One season (more of the same), I asked why they raced in silver, rather than Germany’s original racing colour, white. He explained that in the 1930s a new formula was introduced, with a maximum weight of 750kg. When the Merc entry was checked on the eve of the first race, it weighed 752kg and faced disqualification. Desperate mechanics were burning the midnight oil pondering how to lose the excess flab, until one bright spark suggested using a blowtorch. The next morning the car weighed in at precisely 750kg. The body was now gleaming bare metal – having dispensed with 2kg in white paint – and a new livery was born.

Economists may be wringing their hands about the dire consequences of Brexit, but one group I know reckons they might profit from it. Their assumption is that the bigwigs of companies like BT, Burberry, and easyJet, who have publicly backed the ‘In’ campaign must genuinely be fretting and wetting about the consequences for their own P&L. So, if polls nearer June suggest the ‘Outers’ have a decent chance, they plan to launch a special investment vehicle aimed solely at shorting those companies’ stocks.  

Taking an altogether more positive view is a small investment outfit in Luxembourg, who believe that the growth prospects of the EU are as underrated as those of Asia are overrated, and are planning a fund weighted accordingly.  In their charmingly funky English they sought my opinion on their catchy name for the fund, ‘More EUthanASIA’. I said it sounded like a real killer app.

I spend lots of my time investing or advising in the healthcare sector. There’s been carnage in many biotech shares, but I’m still like a moth to the flame because this sector has the unique triple attraction of being a) intellectually interesting, b) undeniably a good thing, and c) if you get lucky, a nice earner. The ‘War on Cancer’ launched by Richard Nixon in 1971 resulted in a walkover for the big C, with the scientists forced to beat a Dunkirk-esque retreat from their overblown promises. But finally we may have reached the ‘end of the beginning’ with a full-scale invasion of the enemy no longer a remote possibility. Take Juno Therapeutics, which arms the body’s own ‘T’ cells to fight back, and has had breathtaking results with liquid tumours.  It was founded less than three years ago and is already worth a cool $5bn.  

Regenerating or replacing tissue may also soon become routine. A pal in New York State is making miniature real human hearts for testing drugs, and hopes to license this technology worldwide (neatly echoing the line from New York, New York, ‘If I can make it there, I’ll make it anywhere’). Meanwhile, Wellbeing International Foundation has opened clinics in Zurich and Frankfurt where they use a simple liposuction process to access stem cells, from which they extract microvesicles (look ’em up).  These are processed and injected back into the bloodstream, prompting better blood flow and enhanced stem cell production, which the company claims can ‘naturally’ repair bone and organ tissue and delay the onset of the symptoms of degenerative diseases.

The biggest potential killer of all is our own rather poorly designed immune system. That’s why flu epidemics and sepsis are so scary – it’s not the virus or underlying infection that kills: they trigger an immune response that can spiral wildly out of control. Immune response is also a key (negative) factor in psoriasis, rheumatoid arthritis, alopecia and a host of other conditions. I’ve recently invested in Swiss company MetrioPharm, which is in early clinical trials with a molecule aimed at modulating (but not switching off) the immune response – the potential applications are almost endless.  

The pace of progress in biotech is so giddy that some scientists I know believe that this century will see the arrival of the first immortals (humans who will never die through illness or the effect of ageing – though they will still have to dodge bullets, tsunamis and poorly piloted Boeings). This could pose the biggest challenge humanity has faced – how to feed, accommodate, employ and entertain people forever. Any takers for a million-year marriage? It could be a bit of a head-scratcher for religious organisations too, since in the absence of death, the whole Judgement Day thing might lose its edge.

John McLaren is the chairman of the Barchester Group and Eagle E-Types, a non-executive director of several companies in the UK and US, and a novelist


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