![]() ## Powering ## the future ## of medicine Annual Report and Audited Financial Statements for the year ended 31 December 2021 RTW Venture Fund Limited ![]() Built on a foundation of deep research, RTW invests with innovative companies looking tobring important new products topatients. #### Financial Highlights Ordinary NAV growth since inception 64.4% 2020: 88.5% Total shareholder return 1 since inception 71.2% 2020: 80.8% Ordinary NAV US$363.0m 2020: US$375.3m NAV per Ordinary Share US$1.71 2020: US$1.96 Price per Ordinary Share US$1.78 2020: US$1.88 NAV per Ordinary Share change in the period -12.8% 2020: 53.9% Share price change 1 in the period -5.3% 2020: 37.2% 1 Total shareholder return and share price change are alternative performance measures (APM). For more information please refer to APM definitions table on page 106 #### Portfolio Highlights NAV invested in portfolio companies 66.4% 2020: 68.7% New core portfolio companies 21 2020: 15 Portfolio company investments 42 2020: 22 Publicly-listed portfolio companies 17 2020: 9 Privately-held portfolio companies 25 2020: 13 Portfolio companies’ pipeline products in clinical stage programs 44/55 2020: 25/33 #### Our Investment Manager at a Glance #### RTW powers breakthrough #### therapies that transform #### the lives of millions. Our purpose We are the engine that turns ideas into viable medicines. RTW harnesses the potential of world-leading scientists, entrepreneurs, and investors to accelerate the revolution in medicine. Read more Report of the Investment Manager, page 4 Our values At the core of our business is a set of guiding principles that shape every aspect of RTW: Our global reach Our priority is to unlock value by advancing early-stage scientific development and delivering innovative therapies to patients in need. Progress From research to innovation to reality. Leadership The courage to shape a beer future. Tenacity We find the pathway to success, no maer the obstacles. Rigor Obsessing over science & the data. Collaboration We leverage collective genius. Humility The hunger to learn and improve. Read more Our strategy in action, page 29 IFC Highlights 1 Our Investment Manager at a Glance 2 Chairman’s Statement 4 Report of the Investment Manager 16 Our Long Term Strategy 18 Our Strategy in Action 34 Our Business Model 36 New Company Creation 38 Portfolio Review 43 Operational and Financial Review for the Year 44 Our Key Performance Indicators 46 Risk Management 48 Principal and Emerging Risks andUncertainties 50 Longer Term Viability Statement 51 Engaging with Stakeholders (Section 172) 52 Environmental, Social and CommunityIssues Strategic Report 54 Biographies of Directors 56 Report of the Directors 58 Corporate Governance Report 61 Statement of Directors’ Responsibilities 62 Directors’ Remuneration Report 64 Report of the Audit Commiee Governance Report RTW Headquarters RTW Global Investments RTW Future oces Key 70 Independent Auditor’s Report 74 Statement of Assets and Liabilities 75 Condensed Schedule of Investments 83 Statement of Operations 84 Statement of Changes in Net Assets 86 Statement of Cash Flows 87 Notes to the Financial Statements Financial Statements 101 General Company Information – Investment Objective and Investment Policy 103 Glossary 106 Alternative Performance Measures 107 AIFMD Disclosures 108 Schedule of Key Service Providers Additional Information Defined terms used in the Annual Report are defined in the Glossary. Governance ReportStrategic Report Financial Statements Additional Information 1 ![]() We innovate the # pathway to success #### Chairman’s Statement #### I present the 2021 annual results #### for RTW Venture Fund Limited #### (the “Company”) and am #### pleased to report significant #### milestones during the last year. 2021 Overview Building upon the considerable achievements and extraordinary growth in 2020, the Company and RTW continued executing their strategy in 2021. In spite of the COVID-19 pandemic and market volatility in the biotech sector, the Investment Manager remained focussed on the science-led fundamentals and valuation of the underlying companies and demonstrated an accelerated pace of capital deployment by investing in 21 new portfolio companies, compared with 15 in the previous financial year. This enabled the Company to build its portfolio of innovative biotechnology and medical technology companies and providing solution- driven financing strategies at various points in the individual life cycles of these companies. Despite market volatility in the biotech sector, the Company share price, which fell by 5.3% over the year, significantly outperformed its benchmark, the small-cap heavy Russell 2000 Biotech Index, which fell by 26.9% over the same period while slightly lower than the large-cap heavy Nasdaq Biotech Index which returned +0.6% for the reporting period. From 31 December 2020 to 31 December 2021, the NAV declined by 12.8% from US$375.3 million or US$1.96 per Ordinary Share to US$363.0 million or US$1.71 per Ordinary Share. The largest detractor to the NAV was the share price performance of Rocket, which fell heavily in line with the gene therapy sector as a whole as investors priced in delays to clinical trials. This was partially oset by the beer performance of our private companies, particularly JIXING, and the IPOs of Landos, Immunocore, Prometheus, GH Research, Monte Rosa, Tenaya, Ventyx and acquisition of Inivata. At the beginning of the year, the Company portfolio included 22 core portfolio companies, ofwhich 13 were privately held and nine were publicly listed. All core portfolio companies were initiated as private investments by the Investment Manager. During 2021, the Company added 21 portfolio companies, one of which, Inivata, was later acquired by a third-party, bringing the total number of core portfolio companies to 42, representing c. two-thirds of NAV by the end ofthe year. As in previous periods, to mitigate any drag onperformance due to excess cash awaiting deployment into new private assets, the Company also invested c. one-third of NAV in ahigh-quality portfolio of listed companies or non-core portfolio assets selected by the Investment Manager, to be representative ofpositions that are also held in their other investment funds. Share Issuance During the reporting period our corporate broker, J.P. Morgan Cazenove, reported significant demand from prospective shareholders, which was reflected in the fact that the Company’s share price has traded at an average premium toNAV of c. 10% since its admission. Under our Articles and in accordance with UK Listing rules, the Company has the authority to issue new shares of up to 20% of the outstanding share capital in any rolling twelve-month period without filing an updated prospectus, provided the shares are issued on a non-dilutive basis at a premium to NAV. In response to market demand in 2021, the Company issued a further 20,873,403 shares, an 11% increase in the total outstanding shares of the Company and raising an additional US$44.1 million net of expenses. The share issuance was also modestly accretive to NAV, contributing c. 1% to the NAV growth per Ordinary Share. Migration to the Premium Listing of the Main Market of the LSE As stated in the 2020 Annual Report, the Board intended to raise the profile of the Company with a view to broadening its shareholder base by means of exploring a migration to the Premium Listing of the Main Market of the London Stock Exchange. I am pleased to report that the Company has successfully completed the migration and was admied to listing on the Ocial List of the FCA and to trading on the Premium Segment of the London Stock Exchange plc’s Main Market on 6 August 2021. The application for admission was approved by a shareholder vote at the extraordinary general meeting held on 30 July 2021. The Company also introduced an additional market quote for the shares on the London Stock Exchange denominated in GBP under ticker “RTWG”. There were no changes to the legal form or nature of the Ordinary Shares nor to the reporting currency of the Company’s financial statements which, will remain in US Dollars. The Board believes that the Premium Segment ofthe Main Market is the most appropriate platform for the continued growth of the Company by increasing RTW Venture Fund’s profile, broadening its shareholder register, adding aSterling denomination, and facilitating the Company’s potential eligibility for inclusion in theFTSE UK Index Series. Outlook Even with COVID-19 and war in Ukraine remaining pressing issues worldwide, the Company is looking ahead with optimism and confidence. As a full life-cycle investor, our Investment Manager also invests in public biotech and medtech securities trading at aractive levels. We can take advantage of valuation disparities between small and mid-cap and large-cap companies in the sector and the overall biotech sector correction in 2022. The Investment Manager believes that there remains significant demand for reliable capital to support the discovery and development of scientific innovation globally, 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 grow the Company’s portfolio by aracting demand from new shareholders to assist in the financing of an exciting pipeline of new ideas. These are based upon the Company’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 Company to deliver strong performance over the long term and creating value for shareholders. ‘‘ There remains significant demand for reliable capital to support the discovery and development of scientific innovation globally, and that there is an opportunity to grow footprint in the UK and EU as an active local participant in the biotech ecosystem.” AGM The Company will hold its Annual General Meeting (AGM) on 21 June 2022 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 the AGM in a virtual format, although COVID-permiing it may be held in person at Royal Chambers, St Julian’s Avenue, St Peter Port, Guernsey. However, we encourage our shareholders to share your 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 and your families a healthy, safe, and prosperous 2022. I look forward to updating you further at the time of our interim results later in the year. William Simpson Chairman of the Board of Directors RTW Venture Fund Limited 30 March 2022 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 2 3RTW Venture Fund Limited ![]() -22.0% -1.2% -1.1% -0.5% -0.2% -0.1% -0.4% 0.2% 0.3% 0.3% 0.4% 0.5% 0.6% 0.8% 2.6% 1.3% 4.1% 1.5% -1.0% -1.9% 1.2% 2.0% Increase Decrease 0.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% Performance Allocation New Share Issuance Operating Expense Non-Core positions Other Core positions JIXING VTYX PYXS TNYA GLUE GHRS Inivata RXDX IMCR LABP TARS LUNG ITOS ATHA RNA FREQ RCKT 12.8% NAV decrease ## Rapid advances ## in sciencegive hope ## for world-changing ## therapies #### Report of the Investment Manager Table 1. Financial Highlights RTW Venture Fund Limited Year-end reporting period (01/01/2021 – 31/12/2021) Year-end reporting period (01/01/2020- 31/12/2020) Admission (30/10/2019) Ordinary NAV US$363.0 million US$375.3 million US$168.0 million NAV per Ordinary Share US$1.71 US$1.96 US$1.04 NAV Growth per Ordinary Share (%) -13% +54% – Price per Ordinary Share US$1.78 US$1.88(ii) US$1.04 Share price growth (%) (i) -5% 37% Nasdaq Biotech (iii) 1% 27% Russell 2000 Biotech (iii) -27% 53% (i) Total shareholder return is an alternative performance measure. (ii) As the Company’s December NAV was not published until mid-January and the portfolio enjoyed an exceptionally strong month of performance in December the Company’s share price is shown as being at a discount to the December 31 NAV even though its shares traded at a premium to the published November NAV during December. (iii) Source: Bloomberg. Executive summary We present the year-end results of the Company as of 31 December 2021. Since its listing on the London Stock Exchange in October 2019, the Company has achieved NAV growth of 64.4% from US$168.0 million, or US$1.04 per Ordinary Share, to US$363.0 million, or US$1.71 per Ordinary Share as of 31 December 2021. For the reporting period, the NAV aributable to Ordinary Shares declined by 12.8% from US$375.3 million NAV or US$1.96 per Ordinary Share as of 31 December 2020. This compares with a decline inthe Company’s Russell 2000 benchmark of 26.9%. From Admission to 31 December 2021, theshare price has returned 71.2%. #### Roderick Wong, MD #### Managing Partner Figure 1.Performance drivers as of 31 December 2021 RTW Investments, LP (the “Investment Manager”, “us”, “we”), a leading healthcare-focused entrepreneurial 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 understanding 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. As of 31 December 2021, c. two-thirds of NAV was invested in core portfolio companies, a similar figure to 31 December 2020 despite an increase in share capital and reflecting the Company’s long term target portfolio allocation range. Core portfolio companies typically begin as private investments, reflecting the key focus of the Company’s strategy. However, 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. The Company also invested approximately a third ofits NAV in publicly listed, non-core portfolio assets in order to mitigate any ‘cash drag’ eect pending eventual re-investment in core portfolio opportunities as they arise. The non-core portfolio assets were selected by us and are also held in our other funds. The investments represented in this portfolio are similarly categorized as innovative biotechnology and medical technology companies developing and commercializing potentially disruptive and transformational products. Over the year, our listed core holdings produced the majority of our losses and our private core holdings produced the majority of our gains. In 2021, the NAV per Ordinary Share declined by 12.8%. The main contributors to the NAV per Ordinary Share decrease were Rocket, Frequency, Avidity, Athira, Pulmonx and Tarsus, contributing c. 25% to the decline. These mark to market losses were oset by the performance of our private companies, particularly JIXING and IPOs of Landos, Immunocore, Prometheus, GH Research, Monte Rosa, Tenaya, Ventyx and acquisition of Inivata, together contributing c. 12.3% to the NAV growth. Share issuance at a premium to net asset value contributed c. 1.2% and the balance of our performance is made up of operating expenses and a performance allocation fee credit. On listing, the Company’s core portfolio included six companies, four of which were developing clinical-stage therapeutics and two med tech companies developing transformative devices. Since listing, the Company has added 36 companies to its portfolio and has had one position acquired, with 15 additions in the 2020 financial year and 21 in 2021. Portfolio companies added in the 2021 are listed on the following page. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 4 5RTW Venture Fund Limited ![]() #### Report of the Investment Manager #### continued 1 2 3 4 5 6 7 (A) Portfolio companies by modality 1. Small molecule 35% 2. Medtech 17% 3. Antibody 15% 4. Genetic medicine 15% 5. Cell therapy 7% 6. Targeted protein degraration 8% 7. Spec pharma 3% 1 2 3 4 5 6 7 8 9 10 (B) Portfolio companies by disease area 1. Oncology 30% 2. Autoimmune and inflammation 22% 3. Cardiovascular 15% 4. Rare disease 12% 5. Neurology 5% 6. Ophthalmology 5% 7. Type 1 Diabetes 2% 8. Pulmonary 3% 9. Gastrointestinal 3% 10. Orthodontic 3% 1 2 3 (D) Portfolio companies by geography 1. USA 77% 2. UK and Europe 15% 3. China 8% 1 2 3 4 5 (C) Clinical development stage 1. Preclinical 13% 2. Phase 1 35% 3. Phase 2 24% 4. Phase 3/Pivotal 22% 5. Commercial 7% Key updates for Portfolio Companies during 2021: Clinical – In April 2021, iTeos shared a positive preliminary Phase 1 data update for its TIGIT antibody EOS-448 program in adult patients with advanced solid tumors, indicating EOS-448 was generally well tolerated with no dose-limiting toxicities observed and showed preliminary signs of clinical activity as a monotherapy, including a partial response in a melanoma patient, and stable disease in multiple patients. – In May 2021, Rocket shared positive data updates to its lentiviral vector (LVV)-based gene therapy programs for the treatment of Fanconi Anaemia (FA) and (2) Leukocyte Adhesion Deficiency-I (LAD-I), and (3) Pyruvate Kinase Deficiency (PKD). Rocket also announced that the FDA had put a clinical hold on its adeno-associated virus (AAV)-based gene therapy for Danon disease, a devastating, paediatric heart failure condition. The hold was not triggered by safety concerns and patient enrollment resumed in Q3 2021. – In June 2021, Tarsus announced positive results of Saturn-1 pivotal trial evaluating TP-03 for the treatment of demodex blepharitis. The Saturn-1 Phase 2b/3 trial met all primary and secondary endpoints, and demonstrated significant, clinically meaningful outcomes with no serious treatment-related adverse events and no treatment-related discontinuations. – In August 2021, Immunocore announced acceptance of its Biologic License Application for tebentafusp in metastatic uveal melanoma with the FDA and EMA, with the PDUFA action date set for February 23, 2022. Immunocore received FDA approval for Kimmtrak (tebentafusp) in January 2022 ahead of the expected PDUFAdate. – In October 2021, Avidity announced that the FDA had granted Fast Track Designation to its lead program, AOC 1001, for the treatment of myotonic dystrophy type 1 (DM1). Fast Track Designation enables more frequent interactions with the FDA to expedite the development and review process for drugs intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs. – In November 2021, Rocket provided a positive incremental data update on its adeno-associated virus (AAV)-based gene therapy for Danon disease. Overall, it showed stabilization or improvement in functional and biomarker metrics. Financing – In 2021, nine portfolio companies (Landos, Immunocore, Prometheus, Biomea Fusion, Monte Rosa, GH Research, Tenaya, Ventyx and Pyxis Oncology) launched an initial public oering (IPO) with an average 1.9x valuation step-up from the initial time of investment to IPO, followed by an additional average +15% performance on the first day of trading. – In May 2021, JIXING announced an exclusive licencing agreement with Milestone to develop and commercialize etripamil, a novel calcium channel blocker designed to be a rapid-response therapy for episodic cardiovascular conditions, in China. Following this announcement, the Company participated alongside our other investment vehicles in a Series B financing round. – In May 2021, NiKang Therapeutics completed a US$200 million Series C financing round. The Company alongside other vehicles managed by the Investment Manager participated in the financing round. – We seeded our latest new company creation Yarrow Biotechnology, a biotech developing antisense oligonucleotide-based therapeutics for disorders with high unmet need. In May 2021, Yarrow announced licensing agreement with ProQR for its antisense oligonucleotide technology (ASO) to develop and commercialize potential therapies for an undisclosed CNS target. – In June 2021, iTeos and GSK announced a deal on development and commercialization of iTeos’ EOS-448 TIGIT targeting antibody, under which iTeos is to receive a US$625M upfront payment in addition to potential milestones, and royalty payments on ex-US sales up to US$1.45B in development and commercial milestones. – In June 2021, Inivata announced that NeoGenomics, Inc (NASDAQ: “NEO”) had completed its acquisition of the company, theintention of which had previously been announced on 5 May 2021. NeoGenomics exercised its option to acquire the remaining Inivata equity interest for US$390 million aer it had previously made a US$25 million minority equity investment. – In August 2021, JIXING announced an exclusive license and collaboration agreement with Oyster Pharma to develop and commercialize OC-01 (varenicline) and OC-02 (simpinicline) nasal sprays for the treatment of signs and symptoms of dry eye disease for patients in Greater China. Following this announcement, the Company participated alongside our other investment vehicles in a Series C financing round. – In December 2021, JIXING announced an expansion of its collaboration with Cytokinetics byentering into an exclusive license and collaboration agreement to develop and commercialize omecamtiv mecarbil for the proposed treatment of heart failure with reduced ejection fraction (HFrEF) in Greater China. Our 2021 new investments include: Company name Description H1 2021 Visus Clinical stage biotech developing a presbyopia-correcting eye drop. Ancora Medtech company developing minimally invasive implant for heart failure. Artiva Developer of allogenic cord blood-derived Natural Killer (NK) cell therapy. Ventyx Clinical stage biotech advancing a promising immunology pipeline for autoimmune and inflammatory diseases. Pyxis Oncology biotech developing antibody-drug conjugates. Monte Rosa Pre-clinical stage targeted protein degradation biotech. GH Research Clinical stage biotech developing therapies to manage mental disease. RTW Royalty #2 Royalty as a part of RTW-Urogen deal relating to the development and commercialization of urological cancer treatments.. Numab Therapeutics Swiss biotech developing next-gen multi-specific antibody-based immunotherapies for cancer and inflammation. Yarrow RTW-backed new company creation focused on CNS diseases. Alcyone Gene therapy platform company developing therapies for CNS diseases. Umoja Preclinical-stage lentiviral in vivo CAR-T oncology biotech. Neurogastrx Clinical stage spec pharma focused on gastrointestinal disorders. H2 2021 Magnolia Medical Medtech company focused on innovative blood and fluids collection devices. Artios Oncology biotech developing first-in-class therapies based on DNA DamageResponse. InBrace Medical technology company pioneering a behind-the-teeth teeth straightening approach. Lycia Biotech developing extracellular protein degradation-based pipeline of therapies. CinCor Biopharma developing next-gen treatments for cardio-renal diseases. Acelyrin Biotech advancing an antibody mimetic for inflammatory conditions. Kyverna Biotech developing cell therapy for autoimmune diseases. Third Harmonic Bio Biotech advancing a small molecule for autoimmune mast cell disorders. As of 31 December 2021, the portfolio included 42 companies that were diversified across treatment modalities, therapeutic focus, and clinical stage of their programs (Figure 2A-C). While the portfolio remains dominated by US-based companies (Figure 2D), we are commied to adding UK and EU-based companies in an eort to support the best assets globally and foster local biotech ecosystems where we see aractive opportunities. Figure 2. Portfolio breakdown, by (A) modality, (B) therapeutic focus, (C) clinical stage and (D) geography as of 31 December 2021 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 6 7RTW Venture Fund Limited ![]() 2.5 1.0 USD 1.3 1.6 1.9 2.2 Dec 21 Oct 21 Aug 21 Jun 21 Apr 21 Feb 21 Dec 20 Oct 20 Aug 20 Jun 20 Apr 20 Feb 20 Dec 19 Oct 19 RTW.L Share Price NAV per share 125% 0% -25% % return 25% 50% 75% 100% Dec 21 Oct 21 Aug 21 Jun 21 Apr 21 Feb 21 Dec 20 Oct 20 Aug 20 Jun 20 Apr 20 Feb 20 Dec 19 Oct 19 RTW.L Russell 2000 Biotech Nasdaq Biotech Index #### Report of the Investment Manager #### continued In context to this, it is worth noting that it was a challenging year for gene therapy as a subsector. Of 30 publicly traded gene therapy companies, themedian decline has been 54%, with only three companies up on the year, no drug approvals (the total remains at two), and no public acquisitions. Recent setbacks have spanned safety, ecacy, and CMC (chemistry, manufacturing and controls): Figure 4. Gene therapy setbacks Type Company Program Description Safety Hemophilia B HCC case later adjudicated to patient LentiGlobin for sickle cell disease and Lenti-D for Adrenoleukodystrophy Occurrences of blood cancers Myotubular myopathy Patient deaths at low and high doses Danon disease Adverse immune response in patients Wet AMD Adverse immune response in patients Duchenne muscular dystrophy Adverse immune response in patients Phenylketonuria Liver cancers observed in mice Ecacy Duchenne muscular dystrophy Missing stat sig in critical Phase 2 trial Hemophilia A Diminished ecacy over time Hemophilia A Mouse data did not replicate in monkeys Phenylketonuria Lack of consistent ecacy in patients CMC Duchenne muscular dystrophy More stringent requirements from FDA Hemophilia B More stringent requirements from FDA Metachromatic leukodystrophy More stringent requirements from FDA We believe the companies best positioned to overcome these near-term challenges will be those who have chosen to focus on therapies for severe diseases with limited options and that also have meaningful commercial potential. Rocket’s talented team and programs have been commied to this mission from the start, and we remain optimistic for both our existing programs and new opportunities. As of 31 December 2021, nine portfolio companies, which included Landos, Immunocore, Prometheus Biosciences, Biomea Fusion, Monte Rosa, GH Research, Tenaya, Ventyx and Pyxis Oncology had gone public via an IPO with an average 1.9x step-up from the initial time of investment to IPO and an average private holding period of 0.7 years, followed by an additional average c. 15% performance on the first day of trading. Table 2. Core portfolio companies IPOs in 2021 Company Initial funding type Ticker IPO date Performance on 1st day of trading Landos Series B LABP February 2021 -25% Immunocore Series B\* IMCR February 2021 +66% Prometheus Biosciences Series D RXDX March 2021 +33% Biomea Fusion Series A BMEA April 2021 +9% Monte Rosa Series C GLUE June 2021 +12% GH Research Series B GHRS June 2021 +20% Tenaya Series C TNYA July 2021 +2% Ventyx Series B VTYX October 2021 +31% Pyxis Oncology Series A PYXS October 2021 -17% \*Immunocore originated as a Series A investment with the Investment Manager Portfolio performance and updates The Company’s share price has traded at an average premium of c. 10% since inception (Figure 3A). The Company’s overall returns since inception have outperformed its biotech benchmarks, generating an overall return of c. 71% vs c. 35% by the small and mid-cap heavy Russell 2000 Biotechnology Index and vs c. 40% by the large-cap heavy Nasdaq Biotechnology Index (Figure 3B note: the reporting period for this chart is 30 October 2019 to 31 December 2021). In 2021, the Company’s share price declined by c. 5%, whilst the Nasdaq Biotechnology Index returned c. 1% and the Russell 2000 Biotechnology index returned c. -27% for the same period, respectively. Source Bloomberg. Rocket’s share price declined by 60%, which made it the main detractor from the NAV per Ordinary Share this year (c. -22%). The FDA put Rocket’s Danon program on clinical hold in early May 2021 in order to ensure adequate safeguards for patients in its clinical study. The trial was allowed to resume in August 2021 (for context, this was a fast resolution). The company also shared an update from the first five patients dosed in November 2021. While the data suggest four patients have been stable over their one to two years on study, investors expressed concern that a lack of improvement in certain measurements may make phase 3 trial design more challenging. Despite these points, Rocket remains among the top 3 largest independent gene therapy companies by market capitalisation. Figure 3. RTW.L share price performance (A) and returns (B) as of 31 December 2021 (A) RTW.L share price vs NAV per ordinary share (B) RTW.L performance vs biotech benchmarks 2.5 1.0 USD 1.3 1.6 1.9 2.2 Dec 21 Oct 21 Aug 21 Jun 21 Apr 21 Feb 21 Dec 20 Oct 20 Aug 20 Jun 20 Apr 20 Feb 20 Dec 19 Oct 19 RTW.L Share Price NAV per share 125% 0% -25% % return 25% 50% 75% 100% Dec 21 Oct 21 Aug 21 Jun 21 Apr 21 Feb 21 Dec 20 Oct 20 Aug 20 Jun 20 Apr 20 Feb 20 Dec 19 Oct 19 RTW.L Russell 2000 Biotech Nasdaq Biotech Index Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 8 9RTW Venture Fund Limited ![]() As of 31 December 2021, our top five holdings of non-core portfolio assets represented c. 7% of NAV and consisted of: Alnylam (ticker: “ALNY”), a leading RNA medicine company, Natera (ticker: ”NTRA”), a clinical genetic testing company, Masimo (ticker: “MASI”), a medtech company developing innovative non-invasive patient monitoring technologies, Thermo Fisher Scientific (ticker “TMO”), a leading scientific service provider, and Cytokinetics (ticker: “CYTK”), a clinical-stage biotechnology company developing innovative treatments for cardiovascular conditions. We expect to deploy the capital invested into non-core portfolio assets into private companies as new opportunities arise. Table 5. Overview of portfolio companies’ valuations\* as of 31 December 2021 Portfolio Company Public/ Private Company’s %interest in Portfolio Company’s capital as of 31December 2021 Valuation of Company’s investment as of 31December 2021 % of Company’s net assets as of 31December 2021 YTD P&L as of 31 December 2021 Valuation hierarchy Rocket Public <5% US$51.6 million 13.3% -US$88.8 million Level 1 JIXING Private <10% US$25.6 million 6.6% US$10.5 million Level 3 Prometheus Bio Public <5% US$21.7 million 5.6% US$16.5 million Level 1 Avidity Public <5% US$16.6 million 4.3% -US$0.7 million Level 1 RTW Royalty #2 Private <20% US$13.1 million 3.4% US$1.3 million Level 3 Immunocore Public <1% US$11.0 million 2.9% US$5.1 million Level 1 RTW Royalty #1 Private <10% US$10.0 million 2.6% US$1.8 million Level 3 C4 Therapeutics Public <1% US$9.7 million 2.5% US$0.1 million Level 1 Tenaya Public\*\* <5% US$8.2 million 2.1% US$2.5 million ^ Level 2 GH Research Public <1% US$7.2 million 1.8% US$3.1 million Level 1 iTeos Public <1% US$6.9 million 1.8% US$1.3 million Level 1 Landos Public <5% US$6.1 million 1.6% US$0.9 million Level 1 Tarsus Public <1% US$5.2 million 1.3% -US$4.4 million Level 1 Beta Bionics Private <5% US$4.9 million 1.3% -US$0.5 million Level 3 NiKang Private <5% US$4.6 million 1.2% US$0.4 million Level 3 Ventyx Public\*\* <1% US$4.6 million 1.2% US$1.9 million ^ Level 2 Encoded Private <1% US$4.2 million 1.1% US$2.2 million Level 3 Milestone Public <5% US$4.0 million 1.0% US$0.0 million Level 1 Monte Rosa Public <1% US$3.8 million 1.0% US$1.4 million Level 1 Alcyone Private <5% US$3.7 million 0.9% US$0.0 million Level 3 Pyxis Public\*\* <1% US$3.5 million 0.9% -US$0.4 million ^ Level 2 Umoja Private <1% US$3.4 million 0.9% US$0.1 million Level 3 Ancora Private <1% US$2.9 million 0.8% US$0.0 million Level 3 Visus Private <5% US$2.4 million 0.6% US$0.3 million Level 3 Orchestra Private <1% US$2.3 million 0.6% -US$0.1 million Level 3 Pulmonx Public <1% US$1.9 million 0.5% -US$2.1 million Level 1 Nuance Private <1% US$1.8 million 0.5% US$0.0 million Level 3 Athira Public <1% US$1.7 million 0.4% -US$4.9 million Level 1 Numab Private <1% US$1.7 million 0.4% US$0.0 million Level 3 Neurogastrx Private <1% US$1.6 million 0.4% US$0.0 million Level 3 Kyverna Private <1% US$1.5 million 0.4% US$0.0 million Level 3 Third Harmonic Bio Private <1% US$1.4 million 0.4% US$0.0 million Level 3 Cincor Private <1% US$1.3 million 0.3% US$0.2 million Level 3 Artiva Private <1% US$1.2 million 0.3% US$0.2 million Level 3 Lycia Private <1% US$1.1 million 0.3% US$0.0 million Level 3 InBrace Private <1% US$0.9 million 0.2% US$0.0 million Level 3 Biomea Public <1% US$0.8 million 0.2% -US$0.2 million Level 1 Artios Private <1% US$0.8 million 0.2% US$0.0 million Level 3 Acelyrin Private <1% US$0.7 million 0.2% US$0.0 million Level 3 Magnolia Private <5% US$0.7 million 0.2% US$0.0 million Level 3 Yarrow Private <5% US$0.6 million 0.1% US$0.0 million Level 3 Prometheus Labs Private <1% US$0.1 million 0.0% US$0.0 million Level 3 \* Valuations for Private Portfolio Companies on a fair market value basis as of 31 December 2021. The valuations of Rocket, Avidity, iTeos, Athira, C4 Therapeutics, Milestone, Pulmonx, Tarsus, Landos, Immunocore, Prometheus Biosciences, Biomea, Monte Rosa, GH Research, Tenaya, Pyxis and Ventyx have been calculated using market capitalization based on their publicly quoted market prices as of 31 December 2021. \*\*In accordance with the Company’s valuation policy, the Company 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. ^Also includes Level 1 securities purchased at or aer portfolio company IPO. As of 31 December 2021, two members and one employee of the Investment Manager served on the board of directors of Rocket and two members and three employees served on the board of directors of Landos, JIXING, NiKang, Visus, Alcyone, RTW Royalty #1 and #2, and Yarrow, which in aggregate represented 30.3% of NAV of the Company. #### Report of the Investment Manager #### continued Table 3. Performance of core private and public portfolio investments as of 31 December 2021 Portfolio company Initial Investment Date Valuation Date MOC XIRR Private Holding Period (years) Beta Bionics 6/28/2019 12/31/2021 1.0x -1.0% 2.5 Orchestra 6/28/2019 12/31/2021 0.9x -3.3% 2.5 Frequency^ 7/17/2019 03/23/2021 2.8x 85.3% 1.7 Landos\* 8/9/2019 12/31/2021 1.2x 6.7% 2.4 Immunocore\* 8/13/2019 12/31/2021 1.7x 28.5% 2.4 Avidity\* 11/8/2019 12/31/2021 2.6x 56.9% 2.1 JIXING 2/10/2020 12/31/2021 1.7x 85.3% 1.9 Iteos\* 3/24/2020 12/31/2021 4.2x 136.6% 1.8 Pulmonx\* 4/17/2020 12/31/2021 2.5x 70.6% 1.7 Athira\* 5/29/2020 12/31/2021 2.3x 101.2% 1.6 C4 Therapeutics\* 6/2/2020 12/31/2021 3.6x 126.3% 1.6 Encoded 6/12/2020 12/31/2021 2.1x 62.1% 1.6 Milestone^^ 7/23/2020 12/31/2021 1.6x 43.5% 1.4 Nikang 9/9/2020 12/31/2021 1.1x 8.2% 1.3 Tarsus\* 9/24/2020 12/31/2021 1.6x 45.4% 1.3 Prometheus\* 10/30/2020 12/31/2021 5.0x 382.1% 1.2 RTW Royalty #1 11/13/2020 12/31/2021 1.2x 18.9% 1.1 Nuance 12/7/2020 12/31/2021 1.0x 0.0% 1.1 Tenaya\* 12/17/2020 12/31/2021 1.5x 50.1% 1.0 Biomea\* 12/23/2020 12/31/2021 0.9x -6.5% 1.0 Inivata\*\* 12/24/2020 6/18/2021 2.6x 635.5% 0.5 Prometheus Labs 12/31/2020 12/31/2021 1.0x 0.0% 1.0 Ancora 1/20/2021 12/31/2021 1.0x 2.0% 0.9 Visus 1/26/2021 12/31/2021 1.1x 14.7% 0.9 Artiva 2/23/2021 12/31/2021 1.3x 30.7% 0.9 Ventyx\* 2/26/2021 12/31/2021 2.0x 206.9% 0.8 Pyxis\* 3/8/2021 12/31/2021 1.0x 5.9% 0.8 Monte Rosa\* 3/12/2021 12/31/2021 2.0x 129.4% 0.8 GH Research\* 4/9/2021 12/31/2021 1.9x 139.8% 0.7 RTW Royalty #2 5/5/2021 12/31/2021 1.1x 21.1% 0.7 Numab 5/7/2021 12/31/2021 1.0x -1.0% 0.7 Yarrow 5/14/2021 12/31/2021 1.0x 0.0% 0.6 Alcyone 6/8/2021 12/31/2021 1.0x 0.0% 0.6 Umoja 6/9/2021 12/31/2021 1.0x 8.2% 0.6 Neurogastrx 6/25/2021 12/31/2021 1.0x 0.0% 0.5 Magnolia 7/2/2021 12/31/2021 1.0x 0.0% 0.5 Artios 7/27/2021 12/31/2021 1.0x 0.0% 0.4 InBrace 8/27/2021 12/31/2021 1.0x 0.0% 0.3 Lycia 9/2/2021 12/31/2021 1.0x 0.0% 0.3 Cincor\* 9/22/2021 12/31/2021 1.2x 95.0% 0.3 Acelyrin 10/20/2021 12/31/2021 1.0x 0.0% 0.2 Kyverna 11/9/2021 12/31/2021 1.0x 0.0% 0.1 Third Harmonic Bio 12/17/2021 12/31/2021 1.0x 0.0% 0.0 Average 1.6x 60% 1.1 Public company Price per share as of 29/10/2019 market close (as of listing of the Company) % Return Rocket US$14.00 56% \*These positions originated in the portfolio as private companies and since have gone public; as of 31 December 2021, Monte Rosa, GH Research, Tenaya, Pyxis and Ventyx were under 180-day lock-up provision; \*\*Acquired; ^Exited the position; ^^Milestone is a public company, the Company holds private warrants. Table 4. NAV capital breakdown Type % of NAV as of 31 December 2021 % of NAV as of 31 December 2020 Core portfolio assets (private and public) 66.4% 68.7% Non-core portfolio assets 38.6% 25.4% Cash, due to/from brokers, other\* -5.0% 5.9% Total 100.0% 100.0% \*Other includes liabilities such as other payables and accrued expenses. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 10 11RTW Venture Fund Limited ![]() 2021 2019 2017 2015 2013 2011 2009 2007 2005 2003 2001 1999 1997 1995 1993 9,000 25 20 15 10 5 0 8,000 Price/Share, 10x Sales/Share Price/Sales Price/Share 10x Sales/Share Price/Sales 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2021 2020 2019 2018 2017 2015 2013 2011 2009 2007 2005 2003 2001 1999 1997 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 125% Annual Performance/Gap (%) Russell 2000 Bio Annual Performance Performance Gap Russell 2000 Bio – SP500 75% 25% -25% -75% Sector review and outlook Significant biotech sector underperformance, aractive valuations, high innovation… By some measures of market performance, 2021 was small-cap biotech’s worst calendar year since the financial crisis over a decade ago. The small-cap heavy Russell 2000 Biotech Index finished down -27%, just ahead of 2008’s -31%. Only 2002’s drop of -54% was significantly worse. This performance is most striking compared to the broader markets. The S&P500 finished +27%, making small-cap biotech’s 54% underperformance the largest in history (second largest was 1998’s 42%) (Figure 5). Overall valuations for the Nasdaq Biotechnology Index (NBI) and SPDR S&P Biotech (XBI) have now returned to the historical average (Figure 6). This continues to be coupled with historically low interest rates and historically high innovation. Despite market performance, 2021 was a strong year for innovation. The FDA managed through COVID resource constraints to approve 60 new drugs, topping last year’s 59. Approvals by modality include: RNA for three, novel antibody technologies for three, and cell therapies for two. mRNA firmly established itself as the preferred modality for Covid vaccines, and Intellia demonstrated human proof-of-concept for in vivo CRISPR, unlocking another new modality in the bale against disease. #### Report of the Investment Manager #### continued Migration to the Main Market of the London Stock Exchange We are pleased to report that RTW Venture Fund was admied to the Premium Segment of the Main Market on 6 August 2021 and introduced an additional market quote denominated in GBP under ticker “RTWG”. To satisfy the diversification requirements that we agreed with the UK Listing Authority we reduced our position in Rocket and brought it under 25% of NAV, while adding to the position in our private fund making RTW overall a net-buyer of the security. To note, the sale of Rocket shares by the Company to reduce the position from c. 33% to c.25% did not result in any crystalized losses, as at the time of the Company’s IPO Rocket’s share price was $14 and at the time of sale on 11 May 2021 was $40, representing c.186% upli. We believe the Premium Segment of the Main Market is the most appropriate platform for the continued growth of the Company. We look forward to continuing to advance our presence in the UK and are honoured to bring access to private markets and bespoke negotiated opportunities to an even broader investor base now being listed on the Premium Segment. We also believe that by maintaining a strong presence and providing much needed capital to late-stage venture companies, we are doing our part in fostering a stable and well capitalized investment ecosystem, which we believe will in turnbenefit UK companies and support further innovation. Summary of Portfolio Companies with at least 1.0% position of NAV as of 31 December 2021: As of 31 December 2021, the Company’s portfolio included 42 companies, ranging from biotechnology companies developing preclinical to clinical-stage therapeutic programs, companies developing traditional small molecule pharmaceuticals, and med-tech companies developing or commercializing transformative devices. We selected the Company’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 portfolio companies and their catalysts that had ≥1.0% position size at the end of the reporting period. Table 6. RTW Venture Fund portfolio summary of catalysts (core portfolio holdings >1.0% of NAV) as of 31 December 2021 Portfolio Company Description Public/ Private Clinical stage Expected upcoming catalyst % NAV Rocket Gene therapy platform company for rare pediatric diseases; five clinical programs for Fanconi anemia, Danon, LAD, PKD and IMO. Public: “RCKT” Phase 2 Q2 2022 13.3% JIXING NewCo focused on acquiring rights from innovative therapies in the West for development and commercialization in China. Private Phase 3 Series D; H1 2022 6.6% Prometheus Biosciences Precision medicine company focused on IBD, a chronic inflammatory disease of GI tract; lead antibody program against TL1A. Public: “RXDX” Phase 1 H1 2022 5.6% Avidity Antibody conjugated RNA medicines company; lead program for myotonic dystrophy, a degenerative disease with no therapy. Public: “RNA” Phase 1 H1 2022 4.3% C4 Therapeutics Targeted protein degradation company working on blood cancers. Public: “CCCC” Phase 1 H1 2022 2.5% Iteos Novel immune checkpoint clinical stage company, with lead programs targeting TIGIT and A2A in Phase ½ for advanced solid tumors. Public: ”ITOS” Phase 1 / 2 H1 2022 1.8% Landos Developer of oral therapies for autoimmune disease. Lead program for inflammatory bowel disease. Public: “LABP” Phase 2 / 3 Q2 2022 1.6% Tarsus Clinical stage biotech developing first-in-class therapeutics for. ophthalmic conditions. Public: “TARS” Phase 3 H1 2022 1.3% Milestone Clinical stage biopharma developing interventions for tachycardias. Public: “MIST” Phase 3 Q4 2022 1.0% RTW Royalty #2 Royalty as a part of RTW-Urogen deal. Private – – 3.4% Immunocore T-cell receptor therapy company focused on oncology and infectious disease; lead program for uveal melanoma. Public: “IMCR” Registrational – 2.9% RTW Royalty #1 Royalty as a part of RTW-Ji Xing-Cytokinetics deal. Private – – 2.6% Tenaya Biotech developing therapies that can address the underlying cause of heart disease; lead asset gene therapy for HCM. Public: “TNYA” Preclinical – 2.1% GH Research Clinical stage biotech developing therapies to manage mental disease. Public: “GHRS” Phase 2 – 1.8% Beta Bionics Closed-loop pancreatic system for automated and autonomous delivery ofinsulin. Private Pivotal – 1.3% NiKang Biotech using a structure-based design to develop innovative small molecules against promising molecular targets in oncology. Private Preclinical – 1.2% Ventyx Clinical stage biotech advancing a promising immunology pipeline for autoimmune and inflammatory diseases. Public: “VTYX” Phase 2 – 1.2% Encoded Gene therapy company developing treatments for rare pediatric CNS disorders. Private Preclinical – 1.1% Monte Rosa Targeted protein degradation biotech. Public: “GLUE” Preclinical – 1.0% Aggregate of <1.1% core portfolio companies include: Alcyone, Pyxis, Athira, Pulmonx, Biomea, Orchestra, Visus, Nuance, Numab, Ancora, Artiva, Yarrow, Prometheus Labs, Neurogastrx, Umoja, Artios, Magnolia, InBrace, Lycia, Cincor, Acelyrin, Kyverna and Third Harmonic Bio. 9.8% Source: Bloomberg December 2021. Figure 5. Russell 2000 Biotech Annual Performance Figure 6. Historic sector valuations Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 12 13RTW Venture Fund Limited ![]() 2021 2020 2018 2019 2016 2017 2014 2015 2012 2013 2010 2011 2008 2009 2006 2007 2004 2005 2002 2003 2000 2001 1997 1998 1999 1994 1995 1996 16,000 14,000 10,000 12,000 8,000 4,000 6,000 2,000 – # Deals Value ($Millions) # Deal Value 120 100 80 60 40 20 – 33 62 31 34 14 11 56 7 7 11 29 21 24 18 3 4 14 10 29 49 86 49 27 41 66 59 77 108 #### Report of the Investment Manager #### continued Executing on our strategy We are scientists and entrepreneurs who aspireto change the lives of patients through innovation, and purposeful investing is at the heart of everything we do. We power breakthrough therapies that transform the lives of millions. Maximizing value realization from transformative products takes time, and we believe it is critical tobe involved and invested in such companies throughout various stages of their development and ultimately distribution to patients. In the instances where our research leads us to find that a company doesn’t exist, we have the capability, human power, and funding to create acompany de novo to advance an asset we believe is worth building a business architecture around. As a full life-cycle investor, we recognize 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 and nor do we, 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. Taking a long-term full lifecycle approach and having a true evergreen structure enables us to avoid pitfalls of 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 an impact on patients’ lives. As we look ahead to 2022 and beyond, based on the breadth of opportunities we have been seeing and continue to see, we expect our eorts will translate into further capital commitments. The last 24 months have been very active, as we have added fieen new companies in 2020 and twenty-one in 2021 to the Company’s growing portfolio, and we foresee continuing with a similar investing pace in 2022. In 2021 and continuing in 2022, we are particularly focused on aractive opportunities within small and mic-cap public biotech companies given asymmetric risk / reward profiles of strong fundamentals and decreased valuations. Primary areas of focus remain in genetic medicines, small molecule, antibody and next generation antibody therapies, targeted protein degradation, rare diseases, targeted oncology, and medical technologies. We are excited by advancements weare witnessing in neurology, ophthalmology, immunology, muscular dystrophies, and cardiovascular and pulmonary diseases. We have always emphasized the important point that exciting innovation is taking place globally. Building upon our strong reputation in the U.S., we aim to strengthen our presence with new oces in London and Shanghai to further expand our presence and grow roots in these two strategic geographies. We are as keen on exploring scientific programs coming out of the UK and Europe as we are for those discovered and developed in the U.S. labs. We intend to continue to build inroads and have been actively cultivating deeper relationships in the UK. We believe there is a significant demand for reliable capital providers, such as ourselves, to continue to support scientific innovation and development of transformative therapies for patients. With that in mind, we intend to grow theCompany’s portfolio, by aracting new shareholders to assist in the financing of an exciting pipeline of new ideas. We expect the split to remain close to 80% biopharmaceutical assets and 20% across medical technology assets. In line with prior guidance, we anticipate two-thirds of the investments will be made in mid to later stage venture companies and one-third of the investments focused on active company building around the discovery and development or licensing and distribution of promising assets. Key Portfolio Company Events Post Period End On 6 January 2022, CinCor announced pricing of its US$193.6 million IPO, by oering 12.1 million shares at US$16.00 per share. The shares began trading on Nasdaq Global Market on 7 January 2022 under ticker “CINC”. Since IPO CinCor shares have traded down 4.4% as of 23 March 2022. The Company’s investments in CinCor remains under 180-day lock-up provision. In January 2022, the biotech sector has experienced a further sello driven by investor fears over inflation and interest rates. The sello resulted in a NAV per Ordinary Share decrease of14% as of 31 January 2022. In February 2022, Russia invaded Ukraine, which resulted in further turmoil and uncertainty in the global markets. TheCompany’s NAV per Ordinary Share further declined by 2% as of 28 February 2022. The Company does not have any portfolio companies in the aected regions. RTW Investments, LP 30 March 2022 2022 Outlook Most of the headwinds that we faced over the course of 2021 have either resolved or are far along in the process. In fact, we are hopeful that 2022 will transition to tailwinds, such as a return to business as usual at the FDA, multi-year clarity on drug pricing (should some form of the Build Back Beer bill pass), and a resurgence in M&A. Regarding M&A, 2021’s total deal volume of $109B is down from $169B in 2020 and is the second lowest in the last eight years. We speculate that the mix of more aractive valuations, growing pressure from the coming wave of patent expirations and an explosion of Covid related cash will be a potent recipe for dealmaking in 2022. IPO performance struggled this year under the weight of an all-time high 108 oerings. The average declined ~31% from oer date to YE 2021, aer several years of easy gains for crossover investors. Activity had already begun to slow, with 60% of the year’s IPOs taking place in the first half, and the number of deals in Q4 starting to approach the run-rate that existed before the mid-2020 boom. The number of small and relatively illiquid public companies that have had poor aermarket performance has resulted in the highest number of companies trading at <2x cash in history, creating an exciting backdrop of opportunities for us. We are hopeful this will lead to the kind of environment that favors those with strong fundamental analytical capabilities, and who also have the capital and courage to deploy aer painful losses. These are two of our greatest strengths historically that have enabled us to distinguish ourselves in recoveries, and we are excited to put them to use. We think the primary market risks that bear watching sit largely outside of healthcare and revolve around equities and the dynamic between inflation and interest rates, and overall market volatility due to war in Ukraine. Regardless of what happens to equities generally, we are quite optimistic the historically large performance gap between biotech and the broader markets will narrow. US Biotech Market Cap <10B Source: Bloomberg December 2021. US BiotechIPOs (1994-2021) Source: RTW Research December 2021. Biopharma M&A Volume, 2010-2021 ($B) Figure 7. Biopharma M&A and Deal Capacity Figure 8. US Biotech IPOs Figure 9. US Biotech Companies under $10 Billion Market Cap Deal Capacity $B (~2.5x 2022E Net Debt to EBITDA) Charts adopted from JPM research; \*PFE includes COVID cash flows in EBITDA calculation; \*\*M&A deal include transactions >$1B in total value 2021 2020 2018 2019 2016 2017 2014 2015 2012 2013 2010 2011 2008 2009 2006 2007 2004 2005 2002 2003 2000 2001 1997 1998 1999 1994 1993 1995 1996 # companies trading < 2x cash # companies # companies 700 500 600 400 300 200 100 – 2021 2020 2018 2019 2016 2017 2014 2015 2012 2013 2010 2011 $350 $300 $200 $250 $214 $56 $33 $102 $66 $125 $220 $88 $243 $284 $169 $109 $100 $150 $50 $0 Average deal volume ABBV LLY BMY MRK JNJ PFE\* $100 $60 $80 $12 $14 $36 $41 $83 $96 $40 $20 $0 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 14 15RTW Venture Fund Limited ![]() # Transforming # the lives of millions ### Engage 2 Engage in deep research and unlocking value We developed repeatable internal processes combining technology and manpower to comprehensively cover critical drivers of innovation globally. We seeks 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 eective and/or full curative outcomes to patients. Read more Strategy in Action, page 23 ### Identify 1 Identify transformational innovations We have developed expertise through our comprehensive study of industry and academic eorts in targeted areas of significant innovation. Thanks to the genome, there is more clarity around the causes of disease. Coupled with new exciting modalities that can address genetic diseases in a targeted way, drug innovation is accelerating. Read more Strategy in Action, page 19 #### Our Long Term Strategy Our long-term strategy is anchored in identifying sources of transformational innovations by engaging in a deep scientific research and rigorous idea generation process, which is complemented with years of financial investment, company building, transactional, and legal expertise. ### Support 4 Support full lifecycle 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 lifecycle 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 lifecycle approach and having a true evergreen structure enables us to avoid pitfalls of 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. Read more Strategy in Action, page 31 ### Build 3 Build new companies around promising academic licences 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, oen areas with lile 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. Read more Strategy in Action, page 27 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 16 17RTW Venture Fund Limited ![]() # Identify # transformational # innovations #### Our Strategy in Action #### 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. NAV 4.3% 2020: 3.9% Portfolio company ownership <5% 2020: <5% The need It is estimated that about 40,000 Americans suer from myotonic dystrophy, a rare genetic muscular dystrophy with no approved treatments. 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 Avidity’s lead program is in clinical trials for myotonic dystrophy (MD) and has discovery eorts underway to address additional diseases of the muscle. Next milestone Avidity is expected to share its preliminary Phase 1 clinical trial data for its lead program in myotonic dystrophy in H1 2022. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 18 19RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Identify transformational innovations #### continued #### We believe the best way #### to create value is by #### solving unmet needs As the global life sciences market experiences rapid growth, our strategic focus on addressing unmet patient needs has led to multiple opportunities for value creation. Key Achievements Key Statistics Core portfolio companies 42 2020: 22 Therapeutics c.86% 2020: c.80% New companies added in 2021 21 2020: 15 Medtech c.14% 2020: c.20% Therapeutic areas addressed by core portfolio 10 2020: 9 Portfolio companies’ pipeline products are in clinical stage programs 44/55 2020: 25/33 Priorities for 2022 As we look ahead to 2022, based on the breadth of opportunities we have been seeing and continue to see, we expect our eorts will translate into further capital commitments. The past year has been very active, and we foresee continuing with a similar investing pace in 2022. Primary areas of focus remain in genetic medicines, small molecule, antibody and next generation antibody therapies, rare diseases, targeted oncology, and medical technologies. We are excited by advancements we are witnessing in neurology, ophthalmology, immunology, muscular dystrophies, and cardiovascular and pulmonary diseases. Link KPIs 5 Diversified portfolio across multiple therapeutic areas, treatments modalities and geographies 6 Active and robust pipeline Link principal risks 3 The Investment Manager relies on key personnel 4 Portfolio Companies may be subject to litigation 6 Clinical Development & Regulatory Risks 8 COVID-19 #### Innovation Boom We are living in an era where we are witnessing innovation accelerating at a breakneck speed with unparalleled opportunities for value creation. The growth of new drug modalities has been dramatically accelerating. Whilst small molecules dominated drug development for over 30 years, antibodies and proteins grew quite gradually for about 20 years. Over the most recent decade thenumber of modalities has doubled, and furthermore in the first two years of this decade we added as many new modalities as in the previous ten years. We are seeing validated technologies, such as those derived from DNA and RNA science, that can eectively deliver therapeutic solutions across large swaths of diseases, resulting in companies with highly ecient development engines. We believe there is an opportunity to oer aractive risk-adjusted returns to shareholders by building companies that possess unique and heretofore unrecognized growth opportunities that will benefit by capitalization, proactive skilled management, and supportive and sustainable governance practices. Cheap genetic information Cheap genetic information has revolutionized the discovery process, which is yielding validated drug targets at an unprecedented rate. According to the National Human Genome Research Institute, the approximate cost to sequence a human genome fell to less than $1,000 in 2020. This reduction in cost has fuelled tremendous productivity. According to data from the United States Patent and Trademark Oce, the number of drug patents has inflected upward since 2010, which is translating into more new drugs in company pipelines. Technological applications are also creating platforms of addressable diseases, increasing bandwidth, and enabling companies to target more diseases with superior scientific accuracy and safety profiles than in previous generations of drug development. Market leaders Market valuation and growth Although genetically validated targets can sometimes be addressed by existing traditional approaches, such as small molecules and antibodies, in specific tissues it is hard to beat the speed and ease in which DNA and RNA based medicines can be developed. Gene therapies also carry the potential for a one-time cure and RNA medicines for infrequent injections. The market for genetic medicine has been growing. According to Capital IQ, the cumulative market capitalization of the genetic medicine companies has increased from $9.4B at the end of 2014 to $202.8B by the Cumulative market capitalization of the genetic medicine companies as of 2021 $202.8b 2014: $9.4b FDA new approved drugs in 2021 60 2020: 59 #### We bring together, lead, create, compel to action end of 2021. Genetic medicine includes companies that use in vivo and ex vivo gene therapy, genetic editing, sRNA and mRNA based technologies to develop new treatments. Looking at just 2021, the FDA approved 60 new drugs, topping last year’s 59. Approvals by modality include: RNA for three, novel antibody technologies for three, and cell therapies for two. Additionally, mRNA firmly established itself as the preferred modality for COVID vaccines, and Intellia demonstrated human proof-of-concept for in vivo CRISPR, unlocking another new modality in the bale against disease. 1950’s 1970’s 1980’s 1990’s 2000’s 2010’s 2020’s1960’s #### Growth & decline cycles with incremental innovation New drug modalities are being introduced quicker Paradigm shis with radical/disruptive innovation Source: Modified from Kelvin Sto article 2017; RTW research 121110987654321 1950-70s: Small molecule 1980s: Protein, Antibody 2010s: Oligos, Cell & Gene Therapies 2020+: mRNA, Gene Editing, Protein degradation First-in-human proof-of-concept (POC) Key 1 1980: Recombinant Insulin 2 1981: Recombinant Growth hormone 4 1985: 1st Monoclonal Antibody 5 1987: Recombinant EPO 7 2011: RNAi 8 2015: AAV Gene therapy 9 2015: CAR-T Cell therapy 10 2020: mRNA Vaccine 11 2020: Targeted Protein Degradation 12 2021: In Vivo Gene Editing 3 1983: 1st Antibody-drug conjugate 6 2006: Bispecific antibody Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 20 21RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Engaging in deep research and unlocking value RTW’s team is comprised of individuals with medical and advanced scientific training and legal and banking experience, enabling a deeply dierentiated approach to research, idea generation and strategic investment. NAV 6.6% 2020: 1.3% Portfolio company ownership <10% 2020: <20% The need We formed JIXING in early 2020, borne out of a two-year study of innovation, biotechnology, and access to healthcare in China. JIXING is a Shanghai-based biotechnology company focused on the development and distribution of innovative US and European drugs inthe Chinese market. Mission JIXING will leverage clinical development and commercial expertise in the United States and Europe to bring global innovative medicines to Chinese patients. Status JIXING’s pipeline now includes five assets focused on cardiovascular and ophthalmology conditions with high unmet need through partnerships with Cytokinetics, Milestone, and Oyster Pharma. RTW further capitalized JIXING by providing Series B and C funding. Next catalyst By working closely with the JIXING team we look to in-license additional late-clinical stage or commercial stage assets into its growing pipeline and provide further capital for business operation expansion. Read more Portfolio Review, page 40 # Engaging in deep research and # unlocking value Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 22 23RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Engaging in deep research and unlocking value #### continued #### How we approach #### research and investment 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 significantly improve patients’ lives. Key Achievements Key Statistics Medical conference meetings aended 147 2020: 115 Medical conference presentations aended 3,480 2020: 2,000 Private investments 25 2020: 16 Poster presentations captured 6,500 2020: 3,400 Priorities for 2022 Continue expanding institutional data library and research coverage to track and source the most promising assets globally. – Private investments deal pace in line with 2020–2021 – Two-thirds of the deals to be in mid-late stage venture and one-third in new company creation and early stage venture Link KPIs 1 NAV growth 2 Total shareholder return 3 Premium/discount to NAV 4 Percent of NAV invested in core portfolio companies 6 Active and robust pipeline Link principal risks 1 Failure to achieve investment objective 2 Counterparty Risk 3 The Investment Manager relies on key personnel 4 Portfolio Companies may be subject to litigation 5 Exposure to global political and economic risks 7 Imposition of pricing controls for clinical products and services The well-roundedness of the RTW team, strengthened by strong ties across industry, academia and banking platforms, gives it the ability to source viable prospective target businesses, capitalise them, and ensure public-market readiness. Identify an area of #### transformational innovation We have developed expertise through our comprehensive study of industry and academic eorts in targeted areas of significant innovation. We distill opportunities across healthcare through three distinct lenses: disease areas, scientific technologies, and genetic analysis. #### Identify value and assets #### that answer the unmet need We apply a rigorous approach to idea screening, analysis, and capital commitment. The process starts with the careful tracking of transformational events. Examples of such events include clinical data, regulatory decisions, product launches, competitive entrants, intellectual property disputes, industry transformations, distressed situations, and corporate change. Our analytical approach incorporates the study of historical data gathered from scientific literature, regulatory agencies, medical meetings, management teams, and internal expertise. #### Select assets with high odds #### of becoming approved therapies We assign probabilities to various outcomes and use conservative valuation techniques to assign valuations to the various scenarios. #### Identify how RTW can maximizevalue Opportunities for financial engineering or active involvement are also considered, such as royalties, SPACs, structured deals, distress financing, and company formation. #### An investment strategy #### built for the future #### Accelerating #### the revolution #### in medicine Leveraging RTW’s research process for dierentiated idea generation Our competitive advantage is anchored in our internal idea generation process, which we have refined over the years. In ourfocus areas we aspire to achieve a level of research depth consistent with those making permanent capital decisions, which means we are generally comparing ourselves to the work done within large biotech and pharma companies. The process begins with aending over 100 medical meetings worldwide each year. Medical conferences are where all meaningful scientific data are first shared with the scientific community. Over the years we have built our institutional level database library, enhanced by technology and data science. This eort leads us to some of the most promising assets, where we then seek out the companies or academics behind the projects. Externally, we also generate ideas in traditional ways, too. We place high value on building long-term relationships with management teams and scientists, and enjoy working with our investment firm peers and other players in our community. We like to use the analogy that we are organized much like a business development team at a large biotech company. Across our team we have doctors, scientists, and drug development expertise, along with bankers, lawyers and operators who can execute. Our rigorous approach to deal sourcing involves deep research in areas of expertise The research coverage is structured based on a modality (i.e.gene therapy, RNA medicine, small and large molecules, medtech) or a therapeutic area (i.e. rare disease, cancer, immunology, neurology) with a collaborative, consensus-building approach of gaining the most comprehensive knowledge, leading to conviction on the most likely transformational therapies. We leverage our proprietary in-house research developed over fieen years of operating in the life sciences sector. RTW has developed repeatable internal processes combining an institutional data library, technology, and manpower to comprehensively cover critical drivers of innovation. Work with management teams and syndicate partners 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 lifecycle. Actively engaging our wide network of doctors, academics and universities for promising new academic work. We continue to cultivate relationships with entrepreneurs, principal investigators, and academic institutions to allow for a wide range of intelligence gathering of investment opportunities. Worldwide medical meetings 100+ per year Proprietary data science & genetics research eorts Bioinformatics Collaborative & iterative in-house research 15 year old library Dialogue with entrepreneurs &academics 300+ meetings per year Deep ongoing due diligence 100+ per year Syndicate partner deal flow 50+ per year Deal flow from capital markets 15 year old library Dialogue with management teams 1,000+ per year Only the best investment ideas Private and public Figure 1. Leveraging RTW’s research process for dierentiated idea genration 1234 Internal idea generation External idea generation Combined idea generation Key Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 24 25RTW Venture Fund Limited ![]() # Build new companies # around promising # academic licenses #### Our Strategy in Action #### Build new companies around promising #### academic licenses RTW engages in new company formation around promising academic licenses. We are well-placed to oer support to early-stage life sciences companies and NewCos. RTW’s business and operations teams consist of members with financial, capital markets, legal, regulatory, tax, and accounting expertise and enforces a strong compliance culture. NAV 13.3% 2020: 41.1% Portfolio company ownership <5% 2020: <5% The need Rocket is a clinical-stage platform biotechnology company advancing an integrated and sustainable pipeline of genetic therapies for rare childhood disorders. Mission Rocket’s mission is to develop first-in-class and best-in-class, curative gene therapies for patients with devastating diseases. Rocket was born out of a year-long study in gene therapy. In late 2015, Rocket was formed around a single academic license from a European academic institution. RTW helped Rocket hire a world-class management team, including CEO Dr. Gaurav Shah and COO Kinnari Patel, and continued to identify additional targets and licensed four more academic programs. Status Five products are in clinical trials (2020: five) Two programs in registration-enabling Phase 2 (2020: one). Medium-term milestones First global submission Platform and pipeline expansion. Read more Portfolio Review, page 38 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 26 27RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Build new companies around promising academic licenses #### continued #### How we build #### newcompanies RTW’s business and operations teams consist of members with financial, capital markets, legal, regulatory, tax, and accounting expertise and enforces astrongcompliance culture. Key Achievements Key Statistics New company creation 1 2020: 1 In depth study of China biotech sector before newco creation #### 2 years In-licensing deals for JIXING and Yarrow 4 2020: 1 Longstanding expertise in genetic diseases and oligotherapeutics #### 10+ years Funding rounds backed by RTW in JIXING and Yarrow in 2021 3 2020: 1 Total newco creations 3 Priorities for 2022 Continue due diligence eorts to in-license additional assets into JIXING and Yarrow pipeline. Start a new company creation in the UK. Link KPIs 5 Diversified portfolio across multiple therapeutic areas, treatmentsmodalities and geographies Link principal risks 3 The Investment Manager relies on key personnel #### We leverage #### collectivegenius We leverage our proprietary “data-first” research process to source the highest quality assets across the US, UK, and Europe, and complement the scientific rigour with years of financial investment, company building, and transactional expertise. RTW has a world class infrastructure for supporting new company creation. Because we have always made exciting assets the driver of what we work on, over the years we developed the skills and brought in the talent needed to support companies regardless of stage. This has made its way into our own firm DNA, and most of us actually enjoy being creative on the business side nearly as much as we enjoy science. Our research approach is collaborative and consensus-based, led by the team with industry and academic backgrounds, which sets the tone for exceptional research. We believe that true value creation takes time and solving for patients’ unmet needs endures volatile markets. We have expanded our new ventures team with experienced venture capitalists and drug developers, as well as capabilities in data science technology to enhance data management. Our business team, complemented by experienced investment bankers and ex consultants, focuses on building targeted academic relationships in areas of high yield science, managing the capital markets process and syndicate building, and becoming a thought leader in the broader healthcare ecosystem. Core portfolio companies added in 2021 21 2020: 15 Core portfolio businesses supported in 2021 24 2020: 22 #### Innovative science that gives hope #### to transform the lives of millions The US Market: RTW has a core focus on the US, with deep coverage of opportunities from academia to mid-size public companies. The US Portfolio Companies reflect a larger pool of opportunities created by the most robust venture and capital markets ecosystem. What this means for investors: – access to a robust pool of private and public opportunities – access to venture and capital markets that support innovation The UK & European Market: RTW has identified and invested in exceptional British and European scientific assets. It wishes to contribute to these biotech ecosystems by injecting capital where needed. It intends to engage in NewCo creation around promising early-stage assets by partnering with universities and in-licensing academic programs as well as through its proprietary in-house eorts; and providing financial and human capital to entrepreneurs to advance scientific programs indevelopment. What this means for investors: – access to cuing edge research labs and academic knowledge – access to much greater breadth of science and opportunity – participation in value creation in local biotech ecosystem The China Market: RTW plans to capture commercialization opportunities in China by investing across the venture capital lifecycle from new company formation to IPO to bringing successful innovative Western drugs to Chinese patients. What this means for investors: – access to Chinese budding biotech market, innovation and expertise – an opportunity to establish themselves in a new market with the scope for significant growth RTW Headquarters RTW Global Investments RTW Future oces Key Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 28 29RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Support investments through the lifecycle Drug development is not a linear process. There are advancements and setbacks and we are structured to maximize 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. NAV 2.9% 2020: 1.7% Portfolio company ownership <1% 2020: <1% The need Immunocore is a UK-based publicly traded biotechnology pioneering the development of a novel class of T-cell receptor (TCR) bispecific immunotherapies designed to treat a broad range of diseases, including cancer, infectious and autoimmune disease. Immunocore originated with the Investment Manager as a private company when RTW participated in a $320M Series A round in July 2015, subsequently supporting Immunocore in Series B and C rounds, aswell as through its IPO in February 2021. Mission Immunocore is developing tebentafusp, a novel bispecific T cell receptor (TCR) therapy for uveal melanoma, a rare and aggressive form of melanoma that aects the eye. In addition, the company is advancing ImmTAX, its proprietary platform technology of bispecific molecules that have the potential toovercome the limitations of the natural immune system allowing apatient’s own T cells to recognise and kill the infected or cancerous cells via an immune activating eector function. Status Tebentafusp was in registrational status as YE 2021 and approved in January 2022. Four additional programs in clinic: two Phase 1 trials in oncology and twoPhase 1 trials in infectious disease (Hepatitis B and HIV). Next catalyst Kimmtrak (tebentafusp), a first-in-class TCR therapy, received FDA approval for uveal melanoma in January 2022. # Support investments # through the lifecycle Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 30 31RTW Venture Fund Limited ![]() #### Our Strategy in Action #### Support investments through the lifecycle #### continued #### How we support #### companies through #### thelifecycle We are full life cycle investors supporting scientists and entrepreneurs at any stage wherewe identify opportunity, from academic programs in need of industry sponsorship all the way to mature publicly traded companies. Key Achievements Key Statistics Number of portfolio companyIPOs 9 2020: 6 Average step-up from the time of investment to IPO 1.9x 2020: 1.8x Together NAV contribution 8% 2020: 15% NAV in aggregate of 9 (2020: 5) portfolio companies where we have a board seat c.30% 2020: c.48% Priorities for 2022 Continue supporting existing portfolio companies based on their capital needs, as well as continue expanding our creative financial solutions tool kit. Link KPIs 4 Percent of NAV invested in core portfolio companies 5 Diversified portfolio across multiple therapeutic areas, treatmentsmodalities and geographies Link principal risks 5 Exposure to global political and economic risks Progressing research to #### innovation to reality through #### collaboration, excellence #### and consensus We support companies through the ups and downs of the oen challenging journey to bring therapies to patients. True value realization from transformative products takes time, and in order to capture that value, it is critical to be involved and invested in such companies throughout the various stages of their development and ultimately distribution to patients. Scientific development rarely follows a linear path and nor do we, which is why we are always thinking about the optimal way to support a company. As a full-life cycle investor, RTW has achieved multiple successful transaction milestones and provided creative financial solutions, including successfully creating new companies around academic licenses, supporting those companies along the life cycle by taking them public through reverse mergers, recapitalizations, SPACs, and oering royalty- backed funding. RTW has earned a constructive reputation of being deeply knowledgeable in science, supportive to entrepreneurs and aligned with the companies for the long term, until the maximum value of those underlying assets can be achieved. This has become an earned privilege for us. 44%56% Progressed Same stage Clinical trial progress \*excludes commercial stage portfolio companies and companies added in 2021. Stage Modality Company Name Disease / Tx Area Preclinical Phase 1 Phase 2 Phase 3 Registrational Commercial Genetic Medicine Rocket Rare disease Avidity Rare disease Encoded Rare disease Tenaya Cardiovascular Yarrow Rare disease Alcyone Rare disease Antibody Immunocore Oncology iTeos Oncology Prometheus Inflammation Ventyx Autoimmune Numab Oncology Pyxis Oncology Cell therapy Artiva Oncology Kyverna Autoimmune Umoja Oncology Targeted protein degradation C4 Oncology Monte Rosa Oncology Lycia Inflammatory Medtech and Diagnostics Pulmonx Pulmonary InBrace Orthodontic Magnolia Sepsis (inflammatory) Beta Bionics Type 1 Diabetes Orchestra Cardiovascular Ancora Cardiovascular Prometheus labs Inflammation Spec Pharma Nuance Iron deficiency Small molecule JIXING Cardiovascular Milestone Cardiovascular Tarsus Ophthalmology Athira Neurology Landos Autoimmune Visus Ophthalmology GH Research Neurology Neurogastrx GI Cincor Cardiovascular Acelyrin Inflammatory Nikang Oncology Biomea Oncology Artios Oncology Third Harmonic Bio Autoimmune Clinical stages of the portfolio companies (based on the most advanced program) 44% of portfolio companies have progressed to the next stage of their clinical trials in 2021. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 32 33RTW Venture Fund Limited ![]() I d e n t i f y u n m e t n e e d s I n v e s t i n r e l a t i o n s h i p s S u p p o r t t h r o u g h t h e l i f e c y c l e # A business model # built for the future #### Our Business Model #### What we need to create value Experienced team A collaborative team of doctors, academics, drugdevelopers, coupled with seasoned venture capitalists, investment bankers, lawyers and operators with a strong compliance culture. #### How we create value Our purpose drives everything we do Identify 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. Our purpose #### We power #### breakthrough #### therapies that #### transform the lives #### of millions. Transformational innovations Our long-term strategy is anchored in identifying sources of transformational innovations by engaging in a deep scientific research and rigorous idea generation process, which is complemented with years of financial investment, company building, transactional, and legal expertise. #### Value creation Patient benefits Innovation is the best medicine. We believe solving unmet patients’ needs is the best way to create value. RTW’s top 10 most successful investments since inception commercialized 10 drugs 10 Shareholder Privileged access to private markets and bespoke negotiated opportunities. Total shareholder return since inception 71% 2020: 81% Portfolio companies We support teams trying to solve the inevitable setbacks that occur when introducing a first in class or disruptive therapy. 66% NAV deployed into 42 core portfolio companies 66%/42 2020: 69% (2020: 22) RTW Charitable Foundation Founded as the charitable foundation arm of RTW, RTWCF partners with organizations conducting disease research and championing humanitarian causes. Number of rare disease grants awarded across 6 countries 9 Number of community organizations and research partners have been supported in responding to COVID needs in New York City 12 Invest in relationships 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. Read more Strategy in Action, page 18 Deep scientific expertise 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 lifecycle. Read more Strategy in Action, page 22 Support through the lifecycle 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 directors and stewards of tomorrow’s most exciting and disruptive companies. Read more Strategy in Action, page 30 Read more Portfolio Review, pages 38 – 42 Global reach Our priority is to unlock value by advancing early-stage scientific development and delivering innovative therapies to patients in need. Deep scientific expertise We developed repeatable internal processes combining technology and manpower to comprehensively cover critical drivers of innovation globally to identify biopharmaceutical and medical technology assets that have a high probability of becoming commercially viable products and can dramatically change the course of treatment outcomes to patients. Full life cycle investing Taking a long-term full lifecycle approach and having a true evergreen structure enables us to avoid pitfalls of structural constraints of venture- only or public-only vehicles. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 34 35RTW Venture Fund Limited ![]() #### New Company Creation DiscoveryCompany Preclinical Phase 1 Phase 2 Phase 3 Latest financing round # Realising # world-changing # possibilities Read more Strategy in Action, page 26 Read more Portofolio Review, page 38 Read more Strategy in Action, page 22 Read more Portfolio Review, page 40 Read more Portfolio Review, page 42 #### PUBLIC: RCKT Market cap c.$1.4B #### SERIES CSEED #### Pipeline progress #### FANCONI ANEMIA #### ASO TECHNOLOGY #### AFICAMTEN OC02OC01 #### ETRIPAMIL #### OMECAMTIV MECABRIL #### LADI #### DANON DISEASE #### PKDIMO Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 36 37RTW Venture Fund Limited ![]() Market cap 2021 $1.4B 2020: $3.5B NAV invested 13.3% 2020: 41.1% Portfolio company ownership <5% 2020: <5% Link to strategy 1 2 3 4 Rocket’s pipeline is comprised of first-in- class gene therapies that incorporate both adeno-associated viral vector (AAV) and lentiviral vector (LVV) approaches to gene therapy. They are platform agnostic and choose each program’s gene therapy platform based on what is most practical forthe disorder being targeted. The need Rocket is a clinical-stage company advancing an integrated and sustainable pipeline of genetic therapies for rare childhood disorders. Mission Rocket’s mission is to develop first-in-class and best-in-class, curativegene therapies for patients with devastating diseases. Status – Five programs are in the clinical trials – Two programs in registration-enabling Phase 2 Medium-term milestones – First global submission – Platform and pipeline expansion Preclinical Phase 1 Phase 2/Pivotal Catalyst Disease area Fanconi Anemia (LVV) Q3 2022 Leukocyte Adhesion Deficiency-I (LVV) Q2 2022 Danon Disease (AAV) H2 2022 Pyruvate Kinase Deficiency (LVV) H2 2022 Infantile Malignant Osteopetrosis (LVV) TBD RP-A201 RP-L102 RP-A501 RP-L301 RP-L401 Rocket’s pipeline is comprised of first-in-class gene therapies for rare and devastating, inherited genetic diseases Identifying unmet patient need We seek to invest and build companies developing transformative therapies. Thanks to genome, disruptive innovation of new modular technologies, such as RNA medicine and gene therapy, can addressed undruggable before by older modalities like small molecules and antibodies. Forming and building Rocket Rocket was born out of more than a year-long study in gene therapy. In late 2015, Rocket was formed around a single academic license from a European academic institution. RTW hired a world-class management team, including CEO Dr. Gaurav Shah, COO Kinnari Patel, and CMO Dr. Jonathan Schwartz, and continued to identify additional targets and licensed four more academic programs. Supporting Rocket through the lifecycle RTW completed two private financings, syndicating both the Series A and Series B rounds, and took Rocket public through a reverse merger in January 2018. We believe opportunities exist to license additional gene therapy academic assets into the Rocket pipeline in the future. In addition to our board representation in the company, Rocket’s generous pipeline diversification of now five clinical programs creates an aractive risk reward opportunity, giving us comfort in owning an outsized position in the company. Developing first in class gene therapies Five of Rocket’s clinical programs include four lentiviral vector-based gene therapies for the treatment of: – Fanconi Anemia, a dicult to treat genetic disease that leads to bone marrow failure and potentially cancer; – Leukocyte Adhesion Deficiency-I, a rare genetic disorder of immunodeficiency in young children; – Pyruvate Kinase Deficiency, a rare genetic disorder aecting red blood cells; – Infantile Malignant Osteopetrosis, a rare, severe monogenic bone resorption disorder characterized by skeletal deformities, neurologic abnormalities and bone marrow failure; – and an adeno-associated virus-based gene therapy for Danon disease, a devastating, paediatric heart failure condition. Rocket’s goal is to have all five clinical programs become approved first-in-class gene therapies. The company is aspiring to become the next “Genentech of gene therapy” and we are looking forward to supporting them on this journey. #### Portfolio Review # Seeking gene # therapy cures Governance ReportStrategic Report Financial Statements Additional Information 39Annual Report and Accounts 202138 RTW Venture Fund Limited ![]() #### Portfolio Review #### continued JIXING is a leading biotechnology company commied to bringing innovative science and medicines to underserved patients in China. The need We formed JIXING in early 2020, borne out of a two-year study of innovation, biotechnology, and access to healthcare in China. JIXING is a leading biotechnology company headquartered in Shanghai commied to bringing innovative science and medicines to underserved Chinese patients with serious and life-threatening diseases. Mission Backed by RTW, JIXING partners with global biotechnology companies to develop and commercialize novel, innovative therapeutics to treat unmet medical needs in cardiovascular and ophthalmic diseases. With a strong and further developing asset pipeline, industry leading talent, and patient-centric focus, JIXING is dedicated to delivering a meaningful and lasting impact on patients in Greater China. Status JIXING’s pipeline now includes 5 assets focused on cardiovascular and ophthalmology conditions with high unmet need through partnerships with Cytokinetics, Milestone, and Oyster Pharma. RTW further capitalized JIXING by providing a Series B and C funding. Named Joseph Romanelli, a former President of Merck’s operations inChina and a 25-year pharmaceutical industry veteran, as a new CEO of JIXING. Next catalyst By working closely with the JIXING team we look to in-license additional late-clinical stage or commercial stage assets into its growing pipeline and provide further capital for business operation expansion. Latest funding round in 2021 #### Series C 2020: Series A NAV invested 6.6% 2020: 1.3% Portfolio company ownership <10% 2020: <20% Pipeline assets in 2021 5 2020: 1 Link to strategy 1 2 3 4 Global multi-center Ph3 Studies (GALACTIC-HF) Completed FDA Approval recieved October 2021 Ph2b Studies Completed Ph2 REDWOOD-HCM (dataset released) | To start global Ph3 in Q1 2022 Ph2 to be Initatied in early 2022 Ph2 to be Initatied in early 2022 Ph3 completion in Q3 2022 Ph2 Initiated in Q2 2021 China participated in the Global multi-center Ph3 Studies Initiate Ph3 and parallel Ph1 Study in 2H 2022 Initiate Ph3 and parallel Ph1 Study in 1H 2024 Ph1 Completed | Joining Global Ph3 in Q2 2022 To be initiated To be initiated Initiate Ph3 and parallel PK Study in 2H 2022 To be initiated Omecamtiv Mecarbil (cardiac myosin activator) \*JIXING has exclusive Greater China rights China studies conducted by JIXING Global studies conducted by partner Tyrvaya Nasal Spray (nAChR agonist in preservative-free formulation) 0C-02 Nasal Spray (nAChR agonist) Aficamten (formerly CK274) (cardiac myosin inhibitor) Etripamil Nasal Spray (short-acting calcium channel blocker) HFrEF Dry eye disease Dry eye disease oHCM nHCM HFpEF PSVT Atrial fibrillation (AFib) Assets\* Indications Pre-clinical Phase 1 Cardiovascular Ophthalmology Phase 2 Phase 3 Approval Disruptive science, # driven by heart Governance ReportStrategic Report Financial Statements Additional Information 41Annual Report and Accounts 202140 RTW Venture Fund Limited ![]() Operational and ### Financial Review ### for the year Market Capitalisation The Company’s market capitalisation grew from U$360 million to US$378 million during year. This was driven by equity issuance and oset by a decline in the Company’s share price. Ordinary NAV The Ordinary NAV of the Company declined from US$375.3 million to US$363.0 million during the year. The main driver of the decline was the share price performance of publicly-listed portfolio companies, this was partially oset by issuance of 20.9m shares. NAV Per Ordinary Share The 12.8% decline in NAV per Ordinary Share was primarily driven by the performance of Rocket share price and the Company’s other public portfolio companies. There was also a small positive contribution of approximately 1% from equity issuance at a premium to NAV during the year and a reduction in the performance allocation accrual. Premium / Discount The Company’s shares traded on average c. 10% premium due to market demand during the reporting period. At the year end, the Company’s Ordinary Shares were trading at a 4.1% premium to NAV (2020: 4.1% discount to NAV). The Company’s NAV for December 2020 moved sharply higher but was reported in January 2021 resulting in the shares trading at a discount to the unpublished December NAV in December 2020 and recovering to a premium to the published December 2020 NAV during 2021. Total Return to Shareholders Based on Ordinary NAV As the Company has not paid dividends, thenegative total return for the year of -12.8% (2020: +54.3%) 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 -5.3% in the year compared to the NAV movement of -12.8% was the result of the Company’s shares moving from a discount to a premium. Nevertheless, the Company’s shares traded at a premium to NAV throughout the majority of the period. Ongoing Charges The Company’s ongoing charges ratio is 1.78%,calculated in accordance with the AIC recommended methodology, which excludes non-recurring costs and uses the average NAV inits calculation. Read more Our Long Term Strategy, page 16 Read more Principal and Emerging Risks andUncertainties, page 48 #### Key Statistics Market Capitalisation as of 31 Dec 2021 $378M 2020: $360M Ordinary NAV as of 31 Dec 2021 $363M 2020: $375.3M Premium to NAV as of 31 Dec 2021 4.1% 2020: -4.1% Ongoing charges as of 31 Dec 2021 1.78% 2020: 2.10% Latest funding round in 2021 #### Seed NAV invested 0.1% Portfolio company ownership <5% Pipeline assets in 2021 1 Link to strategy 1 2 3 4 Recent advances have enabled and derisked development of ASO therapeutics for CNS diseases. Next generation sequencing has improved diagnosis and patient pool access. Whilst fundamental understanding of CNS biologyhas made big strides thanks to improved sequencing, biochemistry, and imaging techniques, allowing the deciphering of molecular mechanisms that cause a disease. Furthermore, improved potency and performance through widened medicinal chemistry repertoire and beer molecular understanding, as well as and increases number of tractable CNS genetic targets resulted in substantial improvements inASO therapeutics design. # Opening up # unrealised potential Yarrow is an RTW-incubated company developing antisense oligonucleotide (ASO) therapeutics for severe, genetically defined CNS diseases. The need There are 100+ genetically-defined CNS diseases tractable antisense with oligonucleotide (ASO) therapeutics. However, only 7 monogenic CNS diseases have ASOs in development or approved. Genetically- defined CNS diseases provide a vast opportunity for new, innovative ASO therapeutics. Mission Yarrow is developing ASO therapeutics for severe, genetically defined CNS diseases. Yarrow was founded and incubated by RTW team in New York and is rooted in the firm’s longstanding expertise and commitment to solving genetic diseases and oligotherapeutics. Status Yarow in-licenced its first ASO asset from ProQR. RTW capitalized Yarrow by providing seed funding. Next milestone By working closely with the Yarrow team, we look to expand Yarrow’s internal R&D capabilities, in-licence additional assets into the growing pipeline and further capitalize its business and team expansion. #### Portfolio Review #### continued Governance ReportStrategic Report Financial Statements Additional Information 43Annual Report and Accounts 202142 RTW Venture Fund Limited ![]() #### KPIs Strategic priority Our performance Progress Future intent #### Financial KPIs 1. NAV Growth Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 1 5 6 8 – Includes performance of the portfolio companies and cash management strategy – Net of all fees and costs Key factors – Portfolio performance and progression through clinical trials – Cash management – Capital pool and deployment – Scientific and financial risks 12.8% Ordinary NAV decline during the reporting period driven largely by public companies’ share price performance – Achieve superior long-term capital appreciation; targeting an annualized total return of 20% over the medium term 2. Total shareholder return Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 1 4 5 6 8 – Indicates performance of delivering value to the shareholders Key factors – Portfolio performance – Liquidity of RTW.L shares – General market sentimen (5.3)% return during the reporting period (US$1.88 to US$1.78 price per share) – Achieve superior long-term capital appreciation; targeting an annualized total return of 20% over the medium term 3. Premium/discount to NAV Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 1 4 5 – Indicates the level of supply and demand for the Company’s shares Key factors – Portfolio performance – Liquidity of company’s shares – Governance The Company traded at an average premium of c.10% to NAV during the year. – Achieve superior long-term capital appreciation; targeting an annualized total return of 20% over the medium term The Board has identified the following indicators for assessing the Company’s annual performance in meeting its objectives: ### Our Key Performance ### Indicators Strategic priority Our performance Progress Future intent #### Financial KPIs 4. Percent of NAV invested in core portfolio companies Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 2 3 5 8 – Indicates level of capital deployment into core portfolio companies Key factors – Level of capital deployment and investment pace, as well as funds availability to be deployed into new portfolio companies or for follow-on investments into existing portfolio companies More than 2 /3 of the NAV capital deployed into core portfolio companies – Identify transformative assets with high growth potential across the biopharmaceutical and medical technology sectors #### Non-financial KPIs 5. Diversified portfolio across geographies and therapeutic modalities Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 2 5 – Measures Company’s commitment to invest in the best-in-class science and innovative assets worldwide Key factors – Continue to diversify within life sciences sector, looking for opportunities globally and also support local biotech ecosystems Portfolio companies’ focus spans across multiple therapeutic areas, treatment modalities and geographies: – Progress investing and supporting companies developing next generation therapies and technologies that can significantly improve patients’ lives 6. Active and robust pipeline Relevant strategy: 1 2 3 4 Relevant principal risks and uncertainties: 2 5 7 8 – Delivers transformational new treatments and medical devices to patients in need Key factors – Balance and breadth of the pipeline across all clinical stages – Data readouts and progress through multiple clinical stages – Commercial opportunity and competitive landscape 44/55 programs are in clinical stage capturing a spectrum of early-stage Phase 1 to late stage Pivotal – Progress towards delivering transformational treatments to patients in areas of high unmet need Link principal risks 1 Failure to achieve investment objective 2 Clinical Development & Regulatory Risks 3 The Investment Manager relies on key personnel 4 NAV growth and performance drivers 5 Exposure to global political and economic risks 6 Clinical Development & Regulatory Risks 7 Imposition of pricing controls 8 Impact of COVID-19 Link strategy 1 Identifying 2 Engaging 3 Building 4 Supporting Read more Our Long Term Strategy, page 16 Read more Principal and Emerging Risks andUncertainties, page 48 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 44 45RTW Venture Fund Limited ![]() 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 come the risk. Our risk framework is overseen by the Audit Commiee under delegation from the Board. Everyone participates in managing the risks, including the Board, the RTW team, the Company’s other advisers, and our portfolio companies. Risk framework Our risk framework begins with the Board, where the Board defines risk appetite, oversees the process to ensure a robust assessment of principal risks, considers the key risks and potential future risks, and receives an update at each Board meeting. A risk register is maintained that sets out our principal risks and risk appetite. 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 eectively 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 Commiee oversees and monitors the risk framework, including reviewing the risk register to ensure it properly captures the principal risks, overseeing the framework for identifying risks (including potential future risks), reviewing the ongoing operation and eectiveness of our control environment to manage the principal risks we face on an annual basis, and ensuring that any actions identified are taken forward by the RTW team. This review process provides a focus to drive continuous improvement in our risk processes. Our long-term strategy is anchored in identifying transformative assets with high growth potential across the biopharmaceutical and medical technology sectors. Risk management structure #### Board of Directors Risk management leadership; risk appetite #### Audit Commiee Review and monitor the risk framework #### Other advisers Risk identification; risk reporting #### RTW Team Risk management is integral to the investment process and financial management Implementing and monitoring risk controls; risk reporting #### Portfolio companies’ management teams Risk identification and mitigation Planning for #### future growth Identifying principal risks We evaluate our principal risks on an ongoing basis and using both top-down and boom-up inputs. We also continuously assess for future risks that could have a potential impact. During the year the Board and the Investment Manager had ongoing discussions and reviews to consider the current and potential risks of the Company. We were pleased that our principal risks substantially capture our key strategic risks to the success of our business model. The discussions also generated insights into a range of potential emerging risks and has helped to focus aention on additional areas for monitoring by the Board and the Investment Manager. The RTW team carries out a boom-up review, considering each of our life science companies and our internal operations, both as a specific exercise and on an ongoing basis through our 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 Commiee in detail each year. The principal risks identified by the Board are set out on pages 48 to 49. These have not substantially changed in the last year. The Board also monitors future risks that may arise, including: the longer-term risks of changes to US pharmaceutical drug pricing; US FDA productivity and impact of the COVID-19 pandemic; and potential long-term impact of the COVID-19 pandemic on the biotech sector and portfolio companies. 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 reviews the risk appetite in relation to each of the principal risks, and monitors the actual risk against that. Where a risk is approaching or outside the target risk, the Board will consider the actions being taken to manage the risks. The Audit Commiee this year carried out a detailed review of the defined risk types, to ensure it continues to reflect the understanding of the Board and accurately reflected the risks we take. Following that review the Audit Commiee recommended to the Board that the risk appetite remained appropriate, and the Board has accepted that recommendation. #### Risks Management Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 46 47RTW Venture Fund Limited ![]() #### Principal and Emerging Risks #### andUncertainties Under the FCA’s Disclosure Guidance and Transparency Rules the Directors are required to identify the material risks to which the Company is exposed, and the steps taken to mitigate those risks. The Company has five categories of risks in its risk register namely: – Investment Risks – Operational Risks – Governance/Reputational Risks – External Risks – Emerging Risks Risk type Risk description Risk control measure #### Investment 1. Failure to achieve investment objective The Company’s target return on net assets is not guaranteed and may not be achieved. The Board will monitor and supervise the Company’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. #### Operational 2. Counterparty Risk The Company 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 Company uses Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch as prime brokers and Cowen, UBS, Bank of America Merrill Lynch, Goldman Sachs, 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 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 Ocer. There has been no disruption in operations with the Company’s counterparties to date. The Company’s bankers are an oshore branch of Barclays Bank PLC and are also included inthe Investment Manager’s CDS monitoring program. #### Governance/ #### reputational 3. The Investment Manager relies on key personnel The Investment Manager relies on the founder of RTW, Roderick Wong M.D. and has a growing team. Roderick Wong is a key figure at the Investment Manager and will be 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 Company and return capital to shareholders, or to appoint a new Investment Manager. 4. 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 rebued. The Investment Manager’s due diligence process includes considering the risk that innovative therapies may have unforeseen side eects, based on the Investment Manager’s extensive sector knowledge and experience, and based on research all published and publicly available information based on safety concerns. #### External 5. Exposure to global political and economic risks It is anticipated that approximately 75% of investments will be in US companies or licensing agreement with US institutions and 25% of investments will be made outside of the US. The Company’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. 6. Clinical Development & Regulatory 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 the likely aitude of regulators towards a potential new therapy. The due diligence will also consider the unmet need of the disease and whether the therapy oers advantages over the current standard of care. In the current COVID-19 pandemic it is possible that the FDA and other clinical regulators globally will prioritise therapies, diagnostics and devices related to this disease which might slow clinical trials. Risk type Risk description Risk control measure #### External 7. Imposition of pricing controls for clinical products and services 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. 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. 8. COVID-19 As the global pandemic due to COVID-19 enters its third year, the UK government in common with the US and many other countries has taken steps to remove the restriction that were put in place to limit the transmission of the COVID-19 virus. Whilst the ultimate scope of these measures has been eased by various degrees across geographies, they have had a severe impact on the Global Economy, which Governments and the Central Banks were aempting to oset with both traditional and unconventional fiscal and monetary policy measures. The Company’s portfolio will be impacted by any risks emerging from long term changes in the macroeconomic environment. 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. #### Emerging 9. Inflation 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. The compounding creation of value through innovation in thebiotechnology sector, in which the Investment Manager invests, outweighs the singular and/ or short-term adjustment to valuation levels arising from changes in discount rates as aresult of rising inflationary expectations. This may lead to reduced demand for the Company’s shares. The Investment Manager holds investments that have current earnings and cash-flows and has a significant exposure to phase 3 products which have a high probability of achieving cash-flows in the near-term. 10. Availability of capital A record number of Biotech IPOs occurred in 2021 and arecordnumber of companies are trading at <2x than their cash balances, implying that the market believes that not allcompanies will survive. The Investment Manager is experienced in identifying potential in companies that have strong fundamentals at aractive valuations that create an asymmetric and aractive risk/reward profile. The Board reviews the financing status of the Company’s private portfolio with the manager at each valuation meeting. 11. Ukraine Invasion The Invasion of Ukraine by Russia 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 the potential to delay the global economic recovery from Covid-19. The Investment Manager has confirmed that the Company has no direct or indirect exposure to Russian securities or assets. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 48 49RTW Venture Fund Limited ![]() #### Realising a robust #### and resilient company #### Longer Term Viability Statement 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 Company 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 eectiveness 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 eectiveness 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 46, is taken into account. The Board reviewed the impact of stress testing the quantifiable risks to the Company’s cash flows as detailed in risk factors 1-5 in the previous pages and concluded that the Company, would have sucient working capital to fund its operations in the following extreme scenario: (1) The Company incurred NAV losses of 39% of NAV over a three-year period ending 28 February 2025. (2) No new capital was raised. (3) $110m of private investments were funded from cash and by selling public portfolio investments. To provide some context for this scenario the worst-case annual losses for the NASDAQ Biotech Index (NBI) in the last 10 years were 8.9% in 2018 and 21.4% in 2016 respectively. The Company’s three-year loss scenario exceeds the cumulative impact of both of these worst-case years of 28.3% spread over three years. The annualized volatility of the NBI index for the last 10 years is 25% so an annual loss of 40% or more is only likely to occur every twenty years if the index returns are normally distributed. As there have been no consecutive losing years for the NBI in recent history a cumulative loss of between 28.3% and 40% is therefore assumed to be a reasonable stress test. The Board considers that this stress testing- based assessment of the Company’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 Company over a three-year period ending 28 February 2025. Whilst the Board has no reason to believe the Company 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 Company’s longer term viability, based on the stress testing scenario planning discussed above, is the three year period to February 2025. 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 Company, 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 Company and its stress testing-based assessment of the Company’s prospects, the Board confirms that it has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to February 2025. On behalf of the Board William Simpson Chairman 30 March 2022 Stakeholder group Methods of engagement Benefits of engagements #### Shareholders The major investors in the Company’s shares are set out on page 57. Continued access to capital is vital to the Company’s longer term growth objectives, and therefore, in line with its objectives, the Company seeks to maintain shareholder satisfaction through: – Positive risk-adjusted returns – Continuous portfolio updates communication. The Company engages with its shareholders through the issue of regular portfolio updates inthe form of RNS announcements and quarterly factsheets. The Company 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 Company, through its brokers andInvestment Manager underw 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 their investor engagement and investor sentiment. In the financial year the Company issued: – 26 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Company has met with 150+ investors/ prospective investors. #### Service providers The Company does not have any direct employees; however, it works closely with a number of service providers (the Investment Manager, Administrators, secretaries, 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 Company. The Company 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-commiees engage regularly with its service providers on a formal and informal basis. The Company will also regularly review all material contracts for service quality and value. The feedback given by the service providers isused to review the Company’s policies and procedures to ensure open lines of communication, and operational eciency. #### Portfolio Companies The Company has currently invested in 42 Portfolio Companies which are set out on page 10. 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. Honesty, fairness and integrity of the management teams of the portfolio companies are vital to the long-term success of the Company’s investments. #### Community & Environment The Company does not have any direct employees. The Company aims to minimize its environmental footprint. The Company and the Directors minimise airtravel by making maximum use of video conferencing for Company related maers. Climate change impact The Company does not anticipate any material impact to its business model from climate change. RTW Charitable Foundation RTW Charitable Foundation was created by the Investment Manager so that RTW can apply its work in the community and help patients in instances when there is limited potential for commercial gain. RTW Charitable Foundation represents an extension of the Investment Manager’s mission where its research process helps RTW identify important causes of human suering, and introduces the firm to individuals and organizations trying to make a dierence. To the research grant recipients, RTW Charitable Foundation oers not only financial support, but also guidance gleaned from RTW’s experience in drug development and company building. Beyond research, RTW Charitable Foundation oers support to humanitarian causes, initiatives that raise disease awareness and programs with a direct patient impact. #### Engaging with Stakeholders #### (Section172) Section 172 of the Companies Act 2006 applies directly to UK domiciled companies. Nonetheless the AIC Code requires that the maers set out in section 172 are reported on by all companies, irrespective of domicile, provided this does not conflict with local company law. 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 Company 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 Company or are significant to any of the Company’s key stakeholders. The Company’s engagement with key stakeholders and the key decisions that were made or approved by the Directors during the year are described below. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 50 51RTW Venture Fund Limited ![]() # Governance # Report #### Governance Report 54 Biographies of Directors 56 Report of the Directors 58 Corporate Governance Report 61 Statement of Directors’ Responsibilities 62 Directors’ Remuneration Report 64 Report of the Audit Commiee #### Environmental, Social #### andCommunity Issues As an investment company, the Company does not have any employees or physical property, and most of its activities are performed by other organisations. Therefore, the Company does not combust fuel and does not have any greenhouse gas emissions to report from its operations, nor does it have direct responsibility for any other emission producing sources. Responsible Investing The Board believes that all companies have a duty to consider their impact on the community and the environment. Three of the four Directors, the Administrator, Company Secretary and external auditor are all based in Guernsey and Board meetings are held in Guernsey, thus negating the need for long commutes or flights to/from Board meetings, and thereby minimising the negative environmental impact of travel to/ from Board meetings. The Investment Manager’s approach to investment in life sciences companies is comprised of goals and principles that are aligned specifically with our mission to power breakthrough therapies that transform the lives of millions, to find cures for diseases, and improve quality of life. RTW invests in and supports companies developing life- transforming therapies and technologies for patients alicted with disease and disability. As a guiding principle, we prioritize overall positive impact on patients and long-term meaningful outcomes to society. We believe that staying aligned with RTW’s founding principles is the foundation of our success and enables us to make socially conscious and responsible investments in life sciences companies. RTW Charitable Foundation RTW has also created the RTW Charitable Foundation so that we can apply our work in the community and help patients in instances when there is limited potential for commercial gain. While improving human health on a global scale is its own fulfilment, RTWCF allows RTW to bring hope to those with the rarest of diseases but whose suering we find no less aecting. #### Environmental, Social #### andCommunity Issues Governance ReportStrategic Report Financial Statements Additional Information 53Annual Report and Accounts 202152 RTW Venture Fund Limited ![]() #### Leaders that #### are shaping #### our future Leadership The leadership team consists of highly experienced professionals and business experts with profound understanding of the dynamics of the industry, at both a local and international level. Board meetings and main subjects discussed in 2021 Corporate strategy Finance Structure and capital Risk management and internal control Corporate governance and ESG Women Men Board diversity William Simpson Chairman – Guernsey resident Biography 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 maers. 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. Date of appointment 2 October 2019 Board meetings aended 7/ 7 Commiee chair Management Engagement Commiee Commiee membership Audit Commiee Nomination Commiee Remuneration Commiee #### Biographies of Directors Paul Le Page Chairman of the Audit Commiee – Guernsey resident William Sco Chairman of the Nomination and Remuneration Commiee – Guernsey resident Stephanie A. Sirota Non-Executive Director – non-UK resident Biography 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 Commiee Chair of Bluefield Solar Income Fund Limited and was previously Audit Commiee Chair of UK Mortgages Limited, Thames River Multi Hedge PCC Limited and Cazenove Absolute Equity Limited. Mr. Le Page has 18 years’ Audit Commiee 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 Wa University. He originally qualified as a Chartered Engineer and led the development of clinical diagnostic instrumentation and soware and robotic sample preparation equipment prior to commencing a career in finance. Biography William Sco serves as an independent non-executive director of a number of investment companies and funds. From 2003 to 2004, Mr. Sco worked as Senior Vice President with FRM Investment Management Limited, now part of Man Group. Previously (from 1989–2002), Mr. Sco was a portfolio manager and laerly 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 Assistant Investment Manager with the London Residuary Body Superannuation Scheme (1987-1989). Mr. Sco graduated from the University of Edinburgh in 1982 and is a Chartered Accountant having qualified with Arthur Young (now EY) in 1987. Mr. Sco 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. Biography Stephanie A. Sirota, serves as a Partner and ChiefBusiness Ocer 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. Ms. Sirota has a decade of deal experience in financial services. 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 oces of Lehman Brothers, where she advised on various mergers and acquisitions, IPOs, and capital market financing transactions with a focus on cross-border transactions for the firm’s global corporate clients. 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 has contributed to Fortune Magazine and ABCNews. com and is a supporter of the arts, science, and children’s initiatives. She serves as Co-Chairman of the Council of the Phil at the New York Philharmonic and as President of RTW Charitable Foundation. Ms. Sirota serves as Vice President ofCorporate Strategy and Corporate Communications of Health Sciences Acquisitions Corporation 2 (HSAC2) and served in the same role at Health Sciences Acquisitions Corporation (HSAC) until December 2019. Date of appointment 2 October 2019 Board meetings aended 7/ 7 Commiee chair Audit Commiee Commiee membership Nomination Commiee Remuneration Commiee Management Engagement Commiee Date of appointment 3 October 2019 Board meetings aended 7/ 7 Commiee chair Nomination Commiee Remuneration Commieee Commiee membership Audit Commiee Management Engagement Commiee Date of appointment 2 October 2019 Board meetings aended 7/ 7 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 54 55RTW Venture Fund Limited ![]() #### Report of the Directors The Directors hereby submit the annual report and audited financial statements for the Company for the year ended 31 December 2021. Principal activities Further information on the principal activities of the Company can be found on pages 101 to 102. Business review A review of the Company’s business and its likely future development is provided in the Chairman’s Statement on pages 2 to 3. The underlying investments of the Company are reviewed in the Investment Manager’s Report on pages 4 to 15. Results and distributions The results of the Company for the year are shown in the audited statement of operations onpage 83. The Net Asset Value of the Company as at 31December 2021 was US$387.4 million (2020: US$412.6 million). For the year ended 31 December 2021, the Company recorded a net total return based onNAV per share of -12.8 per cent. No dividends or distributions were paid during the years ended 31 December 2021 and 31 December 2020. 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 material changes in the Company’s dividend policy from that disclosed in the prospectus published by theCompany on 14 October 2019. Capital Structure The Company was incorporated as a limited liability corporation in Delaware on 16 February 2017. The Company was subsequently re- domiciled to Guernsey as a non-cellular company limited by shares under the Companies Law on 2 October 2019 with registered number 66847. On 30 October 2019, all of the issued Ordinary Shares of the Company were listed and admied to trading on the Specialist Fund Segment of the LSE under ticker symbol: RTW. On 6 August 2021 the Company successfully completed the migration and was admied to listing on the Ocial List of the FCA and to trading on the Premium Segment of the London Stock Exchange plc’s Main Market. The application for admission was approved by shareholder vote at the extraordinary general meeting held on 30 July 2021. The Company also introduced an additional market quote for the shares on the LSE denominated in GBP under ticker “RTWG”. There were no changes to the legal form or nature of the Ordinary Shares nor to the reporting currency of the Company’s financial statements (which remain in US Dollars). The Board believes the Premium Segment of theMain Market is the most appropriate platform forthe continued growth of the Company by increasing RTW Venture Fund’s profile, broadening its shareholder register, adding sterling denomination, and facilitating the Company’s eligibility for inclusion in the FTSE UK Index Series. As at 31 December 2021, the Company’s issued share capital was 212,389,138 Ordinary Shares and 1 Performance Allocation Share. There are no shares held in treasury. Further issues of shares will only be made if the Directors determine such issues to be in the best interests of shareholders and the Company 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 NAV per Ordinary Share announced as of the end of the immediately preceding month in which such Ordinary Shares are being issued. Directors’ authority to issue shares Subject to the Company’s Articles of Association, 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 30,586,670 Ordinary Shares (being 14.99 per cent. of the issued Share Capital) as authorised at the AGM of the Company on 22 June 2021. At the AGM scheduled to take place on 21 June 2022, the Board will seek to renew such authority. Any buy back of Ordinary Shares will be made subject to 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, aer 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. Directors’ authority to buy 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 page 51. Annual General Meeting The Annual General Meeting (“AGM”) of the Company will be held on 21 June 2022 at 1st 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 Commiee Chairman, will be in aendance at the AGM and will be available to answer shareholder questions. Major Shareholders As at 31 December 2021 and 29 March 2022, 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 29,218,773 13.76 Indirect Ducasse Group Limited 18,361,456 8.65 Direct Details of the voting rights can be found on page 98. Corporate Brokers On 11 February 2022, Merrill Lynch International (BofA Securities) was appointed as corporate broker and financial adviser to the Company. BofA Securities and J.P. Morgan Cazenove have been appointed to act as joint brokers for the Company. Change of control There are no agreements that the Company considers significant and to which the Company is party that would take eect, alter or terminate upon change of control of the Company following a takeover bid. Principal and emerging risks and uncertainties The Company’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 Company 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 Company’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 Company on an on-going basis and these risks are reported and discussed at Board meetings. It ensures that eective 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 aention has been given to the eectiveness 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 Company’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 48 – 49. The financial risks of the Company are discussed in Note 8 to the financial statements. The Company’s other risk factors are fully discussed in the Company’s prospectus, available on the Company’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 taking into account the impact of COVID-19 and Russia’s invasion of Ukraine on the Company’s business model and operations (please see the Longer Term Viability Statement on page 50); – The Company’s ability to raise additional capital both during and aer the current financial year-end. Aer making enquiries and given the nature of the Company and its investments, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements, and, aer 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 2022 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. Articles of Incorporation The Company’s Articles may only be amended by special resolution of the shareholders and if the amendment aects the rights of the holders of Ordinary Shares, by a separate resolution of such holders only. Key service providers Independent auditor KPMG Channel Islands Limited (“KPMG”) have been appointed to serve as the Company’s auditor. In such capacity, the auditor is responsible for auditing and expressing an opinion on the financial statements of the Company in accordance with applicable law and auditing standards. Investment Manager The Directors are responsible for the determination of the Company’s investment policy and have overall responsibility for the Company’s business activities. The Company 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 Company’s investment manager and has been delegated the authority and responsibility to manage the Company’s investment portfolio. The fees payable to the Investment Manager are disclosedin Note 10. Administrator and Sub-Administrator On 1 February 2021, Elysium Fund Management Limited was appointed as Administrator, taking over the administration, corporate secretarial, corporate governance and compliance services from Ocorian Administration (Guernsey) Limited (see Note 11). Further, from 1 February 2021 Morgan Stanley Fund Services USA LLC wasappointed to serve as the Company’s Sub-Administrator. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 56 57RTW Venture Fund Limited ![]() #### 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 seing 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 beer 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 Company as an externally managed investment company. In particular, all of the Company’s day-to-day management and administrative functions are outsourced to third parties. As a result, the Company 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 Company has complied and continues to comply, as far as possible given the Company’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 Company’s shareholder base as the Board is mindful of the need to manage the Company’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 Commiees 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 Commiee), Paul Le Page (Chair of Audit Commiee), William Sco (Chair of the Nomination and Remuneration Commiee) and Stephanie Sirota. The Board believes the current Board members have the appropriate qualifications, experience and expertise to manage the Company. The Director’s biographies can be found on page 54. 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 commiee 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 Company’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 Commiee, Management Engagement Commiee and Nomination and Remuneration Commiee (together the “Commiees”). Given the size and nature of the Board it is felt appropriate that all independent Directors are members of the Commiees. The roles and responsibilities of the Commiees are set out in the terms of reference and are summarised below. Items are discussed and, as appropriate, maers are endorsed, approved or recommended to the Board by the Commiees. The chairman of each of the Commiees provides the Board with a summary of the main discussion points at the commiee meeting and any decisions made by the commiee 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. Maers reserved for the Board include, amongst others, approval and oversight of the Company’s investment activities by ensuring that the Company has complied with its investment restrictions. The Board also reviews the performance of the Company 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 Commiee The Company has an Audit Commiee with formally delegated duties and responsibilities within wrien terms of reference. Further information on the Audit Commiee is included in the Report of the Audit Commiee on pages 64 to 67. Management Engagement Commiee The Management Engagement Commiee is chaired by William Simpson. The commiee currently consists of William Simpson, William Sco and Paul Le Page. The Management Engagement Commiee 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 Commiee 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. Nomination and Remuneration Commiee The Nomination and Remuneration Commiee is chaired by William Sco. The commiee currently consists of William Sco, William Simpson and Paul Le Page. The Nomination and Remuneration Commiee 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 Commiee, Board diversity and Directors’ remuneration are provided in the Directors’ Remuneration Report on pages 62 to 63. Board meeting aendance The Board meets at least four times a year, with further ad hoc Board and Board Commiee meetings as required. Between meetings, there is regular contact with the Secretary and the Company’s Broker, as necessary. The aendance record of the Directors for the year is set out below: Director Scheduled Board Meetings 1 Audit Commiee Meetings Management Engagement Commiee Meetings Nomination and Remuneration Commiee Meetings William Simpson 7/7 5/5 1/1 1/1 Paul Le Page 7/7 5/5 1/1 1/1 William Sco 7/7 5/5 1/1 1/1 Stephanie Sirota 2 7/7 n/a n/a n/a (1) Nine ad hoc Board meetings that were held in the year have not been included in this total. (2) Ms Sirota is not a member of the Audit Commiee, Management Engagement Commiee or Nomination and Remuneration Commiee, however from time to time she is invited to aend and did so during the year. 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 eectiveness and performance in various areas aswell as the Directors’ continued independence. The performance and eectiveness 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 Company. 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 Sco 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 Sco remain independent under provision 10 of the AIC Code. The Board considers Messrs Simpson, Le Page and Sco 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. 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 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 aairs 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 maers and financial reporting; – risk assessment and management including reporting, compliance, governance, monitoring and control; and – other maers having a material eect on the Company. The Board is responsible to shareholders for the overall management of the Company. The Board has adopted a Schedule of Maers 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 Company. 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 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 Company. As a result of the use of professional service providers and the nature of the Company’s operations, the Company does not have any employees. The Company maintains appropriate Directors’ and Ocers’ 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 61. 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 Company strategy, investment performance and associated maers such as share price discount/premium management, investor relations, peer group information, gearing and industry issues and to consider recommendations from the Audit Commiee and other commiees of the Board, as appropriate. 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 eectiveness. 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 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 58 59RTW Venture Fund Limited ![]() 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 Company and undertakings of any external consultant as appointed by the Company 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 Company’s agents and advisers and appointments are made by the Board aer 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 sucient assurance that a sound system of risk management and internal control should, which safeguards shareholders’ investment and the Company’s assets. An internal audit function specific to the Company is therefore considered unnecessary. The systems of control referred to above are designed to ensure eectiveness and ecient 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 Commiee. Listing requirements The Company was a private unlisted investment vehicle throughout 2018 and, until admission to the SFS on 30 October 2019, was not subject tocompliance with any corporate governance codes, laws, rules or regulations ordinarily applicable to public companies listed on anEUregulated market. 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 eective 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 (“UK-Guernsey IGA”) 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 Company who are, orare entities that are controlled by one or more, residents of the United Kingdom. In addition, under FATCA, the Company is required to make certain disclosures and reports to further compliance with the legislation’s requirements. Itis the Company’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 Company and its operations. The Company is a non-EU domiciled Alternative Investment Fund and the Investment Manager has been appointed as the Company’s non-EU AIFM. As the Company 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. 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 Company, from accepting, soliciting, paying, oering 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 Company. 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 Company and continues to refine its process in this regard. 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 Maers The Company has an investment management contract with the Investment Manager. The Company 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 Company is a closed-ended investment company with no employees, its environmental impact is minimal. The Board notes that the companies in which the Company invests directly or indirectly may have an environmental, employee, human rights or social impact of which the Board has no visibility or control. The UK Modern Slavery Act The Board conducts the business of the Company ethically and with integrity, and has a zero-tolerance policy towards modern slavery in all its forms. As the Company has no employees, all 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 Company 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 Company. On behalf of the Board William Simpson Chairman 30 March 2022 #### Statement of Directors’ #### Responsibilities The Directors are responsible for preparing the Annual Report and 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 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 aairs of the Company and of its profit or loss for that period. In preparing these 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 financial statements; – Assess the Company’s ability to continue as agoing concern, disclosing, as applicable, maers 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 financial statements. The Directors are responsible for keeping proper accounting records that are sucient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company 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 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 dier from legislation in other jurisdictions. Responsibility Statement The Directors who hold oce 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 Company’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 Company’s auditor is aware of that information. We confirm that to the best of our knowledge: – the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; – 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 Company together with a description of the principal risks and uncertainties that they face; – the Annual Report and audited financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, position, business model and strategy; and – the Annual Report and audited financial statements includes information required by the FCA for the purpose of ensuring that the Company 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 2022 and was signed on behalf of the Board. On behalf of the Board William Simpson Chairman 30 March 2022 Paul Le Page Director 30 March 2022 #### Corporate Governance Report #### continued Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 60 61RTW Venture Fund Limited ![]() #### Directors’ #### RemunerationReport The Nomination and Remuneration Commiee 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 Commiee comprises all the independent Directors of the Company and is chaired by William Sco. The Company is not required to present a Directors’ Remuneration Report, and this report does not purport to meet all of the requirements of a typical listed UK company’s Directors’ Remuneration Report, but has been provided as the Directors believe that it may be useful to users of this annual report and financial statements. The Company has no employees and hence no executive directors. Directors do not have service contracts, but are appointed under leers 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 Commiee’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 Company 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 eective Board. However, it is the Company’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 Company. The Director’s biographies can be found on page 54. Tenure policy Each Director retires at each Annual General Meeting subsequent to his or her election and is eligible for re-election by the Company at such Annual General Meeting. A Director who retires at an Annual General Meeting 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 Company neither re-elects that Director nor appoints 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 oce (or upon re-election would at the end of that term, be in oce) 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 Sco was appointed on 3 October 2019. Termination policy Should a Director not be re-elected by Shareholders, or retires from oce under the Articles of Incorporation, the appointment shall be terminated with immediate eect 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 eect should the Director have: – Commied any serious breach or (aer warning in writing) any repeated or continued material breach of their obligations to the Company; 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 Company 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 Company, and what skills and expertise are therefore needed on the Board in the future. Overboarding policy To ensure that each Director has sucient time to meet their responsibilities to the Company, 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 Commiee) 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 Company; – Provide an estimate of the time commitment required; – Confirm that they have sucient surplus capacity to meet their commitments to the Company; 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 confirm that they continue to have sucient time capacity and 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$300,000 per annum. However, at the Company’s AGM to be held on 21 June 2022, in accordance with Article 28.1.1 of the Company’s Articles, shareholder approval is sought 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). It is proposed that the increase in the Fee Cap will take eect from the date of the AGM. The current 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 of the LSE in October 2019. The Company has subsequently moved the listing of its shares to the Premium Segment of the Ocial 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 Company’s growth and its strategic plans and priorities over coming years. Accordingly, in order to ensure that the Company maintains the ability to pay competitive fees and aract and retain high calibre Directors, the Board is seeking to increase the Fee Cap to US$500,000. The proposed increase would also provide appropriate headroom to accommodate any future market-based adjustments to Directors’ fees and increases to the 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 seing the level of each non-executive Director’s fee, the Company 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 GBP50,000 Paul Le Page GBP40,000 William Sco GBP35,000 Stephanie Sirota US$42,000 All of the Directors are also entitled to be paid all reasonable expenses properly incurred by them in aending general meetings, Board or commiee meetings or otherwise in connection with the performance of their duties. The Board may determine that additional remuneration may be paid, from time to time, to any one or more Directors in the event such Director or Directors are requested by the Board to perform extra or special services on behalf of the Company. The Directors do not participate in any discussions relating to their own fee, which is determined by the other Directors. The Company does not pay any remuneration to the Directors for loss of oce. On termination of the appointment, Directors shall only be entitled to such fees as may have accrued to the date of termination, together with reimbursement in the normal way of any expenses properly incurred prior to that date. Annual report on remuneration Service contracts obligations and payment on loss of oce No Director has a service contract with the Company and, as such, no Director is entitled to compensation payments upon termination of their appointment or loss of oce. Total remuneration paid to each Director During the year ended 31 December 2021 the US Dollar equivalent of Directors’ remuneration that waspaid was as follows: 31 December 2021 (US$) 31 December 2020 (US$) William Simpson 68,941 71,600 Paul Le Page 55,153 57, 285 William Sco 48,259 49,990 Stephanie Sirota 42,000 42,000 Total 214,353 220,875 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 this page) and the US Dollar equivalent set out above may vary in accordance with fluctuations in the pound/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 2021 are detailed below: Director Number of Shares % Holding 31 December 2021 % Holding 31 December 2020 31 December 2021 31 December 2020 William Simpson 150,000 100,000 0.07 0.05 Paul Le Page 103,000 103,000 0.05 0.05 William Sco 150,000 100,000 0.07 0.05 Stephanie Sirota 1,000,000 763,004 0.47 0.40 On behalf of the Board William Sco Chairman of the Nomination and Remuneration Commiee 30 March 2022 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 62 63RTW Venture Fund Limited ![]() Paul Le Page Chairman of the Audit Commiee Composition The Audit Commiee, chaired by Paul Le Page, operates within clearly defined terms of reference which include all maers indicated by DTR 7.1 and the AIC Code. Its other members are William Simpson and William Sco. The Chairman of the Company is a member of the Audit Commiee but does not chair it. His membership of the Audit Commiee is considered appropriate due to: the lack of perceived conflict; the small size of the Board; and because the Directors consider that he continues to be independent. Only independent Directors can serve on the Audit Commiee and members of the Audit Commiee must have no current links with the Company’s external auditor and must be independent of the Investment Manager. The Audit Commiee can request the aendance 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 Commiee should have recent and relevant financial experience and is satisfied that the Audit Commiee is properly constituted in that respect, with all members being highly experienced and, in particular one member has a background as a chartered accountant. The Board has also considered the inclusion of the Company Chairman within the Audit Commiee and, having considered that the Chairman is independent and non-executive, believes it appropriate for the Chairman to be a member. The performance of the chairman of the Audit Commiee is reviewed on an annual basis and the membership of the Audit Commiee and its terms of reference are kept under regular review. ‘‘ I present the Audit Commiee’s report for financial year ended 31 December 2021, seing for the Audit Commiee’s structure, duties, andactivities during the reporting period.” Report of the #### Audit Commiee Responsibilities The duties of the Audit Commiee in discharging its responsibilities include reviewing: the Interim Report; the Annual Report; the valuation of the Company’s investment portfolio; the system of internal controls; and the terms of appointment of the external auditor together with their remuneration. The Audit Commiee 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 Commiee, 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 aliated firms overseas. The main duties of the Audit Commiee 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 eectiveness, independence and objectivity of the external auditor; – Reviewing the dra valuation of the Company’s investments prepared by the Investment Manager, and making a recommendation to the Board on the valuation of the Company’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 Company’s accounting policies; – Ensuring the standards and adequacy of the service provider’s control systems; – Reviewing and considering the UK Code, the AIC Code and the FRC Guidance on Audit Commiees; and – Reviewing the risks facing the Company and monitoring the risk matrix. The Audit Commiee is required to report its findings to the Board, identifying any maers 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 aend the Audit Commiee meetings at which the Interim Reports and Annual Reports are considered and at which they have the opportunity to meet with the Audit Commiee without representatives of any external consultant as appointed by the Investment Manager being present at least once a year. Financial reporting The primary role of the Audit Commiee in relation to financial reporting is to review with the 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 maers: – 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 Company’s performance, business model and strategy; and – any correspondence from regulators in relation to the Company’s financial reporting. To aid its review, the Audit Commiee 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 Commiee meets no less than twice a year in Guernsey, at such other times as the Audit Commiee Chairman shall require, and meets the external auditor at least once a year in Guernsey. The Audit Commiee met five times in the year ended 31 December 2021. The maers discussed at these meetings were: – Review of the terms of reference of the Audit Commiee to confirm that they are appropriate to the business of the Audit Commiee and the current regulatory environment in which the Company operates; – Semi-annual reviews of the valuations of the Company’s investments; – Review of the accounting policies and format of the financial statements; – The relationship with the external auditor; – Discussion and approval of the fee for the external audit; – 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 Company’s key risks and internal controls. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 64 65RTW Venture Fund Limited ![]() Primary area of judgement The Audit Commiee determined that the key risk of misstatement of the Company’s 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 financial statements of the Company, the total carrying value of the Company’s investments in securities at fair value as at 31 December 2021 was US$409.2 million (2020: US$390.8 million), of which US$92.9 million (2020: US$47.2 million) related to private company investments. Market quotations will be available for those financial assets that are listed and traded and have an active market quote. For private company investments, the value of the Company’s investments is based on the value of the relevant underlying investee companies as determined by the Investment Manager. The valuation of the Company’s private and restricted investments and the methodology used for the year end valuation and constitution of the Investment Manager’s Valuation Commiee was discussed with the Investment Manager and with the external auditor at a Board meeting held on 26 January 2022, and the Independent Valuer, as appointed by the Investment Manager, carries out a valuation semi-annually on the private company investments. The Company values investment in private investment companies using the net asset values provided by the underlying private investment companies as a practical expedient. The Company applies the practical expedient to its private investment companies on an investment-by- investment basis and consistently with the Company’s entire position in a particular investment, unless it is probable that the Company will sell a portion of an investment at an amount dierent from the NAV of the investment. The Audit Commiee has reviewed the valuation papers prepared by the Investment Manager. The Investment Manager confirmed to the Audit Commiee that the valuation methodology had been applied consistently during the year. Aer reviewing the scope and results of the work of the external auditor, the Audit Commiee 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, illiquidity discounts and prices used. On the basis of its audit work, there were no material adjustments proposed to those valuations as approved by the Audit Commiee. Internal audit The Audit Commiee shall consider at least once a year whether there is a need for an internal audit function. Currently, the Audit Commiee does not consider there to be a need for an internal audit function, given that there are no employees in the Company and all outsourced functions are with parties who have their own internal controls and procedures. The Audit Commiee worked with the Administrator and the Investment Manager to structure a risk matrix for the Company, which considered the controls applied by the Board, the Investment Manager and key service providers. The matrix has also been reviewed with the Investment Manager in light of the COVID-19 pandemic and was used to form the basis of the Company’s principal and emerging risk disclosures in the Strategic Report on page 49. The Audit Commiee has reviewed a COVID-19 impact assessment prepared by the Investment Manager as part of the final review process for this Annual Report. The external auditor may not undertake any workfor the Company in respect of the following maers – 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 Commiee reviews the scope and results of the audit, its cost eectiveness and the independence and objectivity of the auditor, with particular regard to the level of non-audit fees. During the year, 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 Commiee considers KPMG to be independent of the Company 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. Appointment of the external auditor KPMG has been appointed as the statutory external auditor of the Company since the Company re-domiciled to Guernsey on 2 October 2019. The Audit Commiee 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 Commiee in order that the Chairman is kept up to date with the progress of the audit and formal reporting requirement by the Audit Commiee. The objectivity of the external auditor is reviewed by the Audit Commiee, which also reviews the terms under which the external auditor may be appointed to perform non-audit services. The Audit Commiee reviews the scope and results of the audit, its cost eectiveness 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 Commiee 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 Commiee before being initiated. To fulfil its responsibility regarding the independence of the external auditor, the Audit Commiee 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 eectiveness of the external auditor, the Audit Commiee 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 Commiee is satisfied with KPMG’s eectiveness 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 eective, the Audit Commiee has recommended to the Board that KPMG be reappointed as external auditor for the year ending 31 December 2022. 2021 2020 Audit fee GBP 168,000 GBP 127,000 Review of interim financial statements GBP 41,000 GBP 40,000 Other non-audit services 1 GBP 62,500 – Total GBP 271,500 GBP 167,000 (1) During the year, KPMG was paid a reporting accountant fee for its work on the migration of the Company’s shares to the Ocial List of the FCA and to trading on the Premium Segment of the London Stock Exchange plc’s Main Market. Annual Report The Audit Commiee members have each reviewed this Annual Report and earlier dras ofitin detail, comparing its content with their own knowledge of the Company, reporting requirements and shareholder expectations. Formal meetings of the Audit Commiee 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 Commiee 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 61. Key activities of the Audit Commiee During the course of the year, the Audit Commiee undertook a number of projects inaddition to its regular duties, which included reviewing the working capital model required formigrating the Company to the LSE and reviewing 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 Commiee reviewed the NAV process, following the administrator change, and the process that was used by the administrator to verify the NAV. It also closely reviewed the first NAV that was produced by the new Administrator and Sub-Administrator. The Audit Commiee is currently working 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. On behalf of the Audit Commiee, Paul Le Page Chairman of the Audit Commiee 30 March 2022 The fees paid by the Company to KPMG during the last two years were as follows: #### Report of the Audit Commiee #### continued Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 66 67RTW Venture Fund Limited ![]() # Financial # Statements 70 Independent Auditor’s Report 74 Statement of Assets and Liabilities 75 Condensed Schedule of Investments 83 Statement of Operations 84 Statement of Changes in Net Assets 86 Statement of Cash Flows 87 Notes to the Financial Statements #### Financial Statements Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 68 69 RTW Venture Fund Limited ![]() Independent Auditor’s Report to the #### Members of RTW Venture Fund Limited 1. Our opinion is unmodified We have audited the financial statements of RTW Venture Fund Limited (the “Company”), which comprise the statement of assets and liabilities including the condensed schedule of investments as at 31 December 2021, the 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 financial statements: – give a true and fair view of the financial position of the Company as at 31 December 2021, and of the Company’s financial performance and cash flows for the year then ended; – are prepared in conformity 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. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company 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 sucient and appropriate basis for our opinion. Overview Materiality: financial statements as a whole $7.7m (2020: $8.3m) Approximately 2% (2020: 2%) of net assets Key audit maer vs 2020 Recurring risks Valuation of investments in securities, at fair value < > 2. Key audit maers: our assessment of risks of material misstatement Key audit maers are those maers that, in our professional judgement, were of most significance in the audit of the 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 eect on: the overall audit strategy; the allocation of resources in the audit; and directing the eorts of the engagement team. These maers were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these maers. In arriving at our audit opinion above, the key audit maer was as follows (unchanged from 2020): Valuation of investments insecurities, at fair value $409,179,507; (2020: $390,790,635) Refer to the Report of the Audit Commiee on page 66, the Condensed Schedule of Investments as at 31 December 2021 on pages 75 to 77, note 1 fair value significant accounting policies and note 2 fair value measurements disclosures. Our response 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 99.6% 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 drawdown 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; – Considered the participation of third party investors in any funding round either at, orsubsequent to, the transaction date; – Assessed and challenged the key assumptions based on 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 The risk Basis The Company’s investment portfolio represents the most significant balance on the statement of assets and liabilities and is the principal driver of the Company’s net asset value (2021: 106%; 2020: 95%). The investment portfolio is composed of publicly quoted and private unquoted life science investments (together the “Investments” ). Publicly quoted life science investments, representing 77% of the fair value of Investments, are valued using third party data sources. Private unquoted life science investments, representing 23% 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 Company’s Investments is considered a significant area of our audit, given that it represents the majority of the net assets of the Company. 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. 3. Our application of materiality and an overview of the scope of our audit Materiality for the financial statements as a whole was set at $7.7m, determined with reference to a benchmark of net assets of $387.4m, ofwhich it represents approximately 2.0% (2020: 2.0%). 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 financial statements as a whole. Performance materiality for the Company was set at 75% (2020: 75%) of materiality for the financial statements as a whole, which equates to $5.8m. 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 Commiee any corrected or uncorrected identified misstatements exceeding $0.4m, in addition to other identified misstatements that warranted reporting on qualitative grounds. Our audit of the Company 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. Valuation of investments insecurities, at fair value (continued) $409,179,507; (2020: $390,790,635) Refer to the Report of the Audit Commiee on page 66, the Condensed Schedule of Investments as at 31December 2021 on pages 75 to 77, note 1 fair value significant accounting policies and note 2 fair value measurements disclosures. Our response (continued) Challenging managements’ Investments valuation, including the use of our KPMG valuation specialists, as applicable (continued): – For private investment company life science investments we obtained independent confirmations, from the administrator of those private investment companies, of the net asset values per share and reconciled these to the net asset values used in the Company’s valuation. Further we obtained the coterminous audited financial statements for those private investment companies to corroborate the net asset values per share used. We also evaluated the accounting framework and accounting policies applied and considered the impact, if any, of the issued audit opinions therein. Assessing disclosures: – We also considered the Company’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, for conformity with US GAAP. The risk (continued) Risk: The valuation of the Company’s Investments is considered a significant area of our audit, given that it represents the majority of the net assets of the Company. 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. Net assets Materiality Net assets $387.4m (2020: $412.6m) $7.7m Financial statements materiality (2020: $8.3m) $0.4m Misstatements reported to the audit commiee (2020: $0.4m) 4. Going concern The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that 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 its ability to continue as a going concern for at least a year from the date of approval of the financial statements (the “going concern period”). In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might aect the Company’s financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to aect 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. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 70 71RTW Venture Fund Limited ![]() Independent Auditor’s Report to the Members of RTW Venture Fund Limited continued 4. Going concern (continued) We considered whether this risk could plausibly aect 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 Company’s financial forecasts. We considered whether the going concern disclosure in note 1 to the 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 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 Company’s ability to continue as a going concern for the going concern period; and – we have nothing material to add or draw aention to in relation to the directors’ statement in the notes to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Company’s use of that basis for the going concern period, and that statement is materially consistent with the 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 Company will continue in operation. 5. 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 Company’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 Company’s revenue streams are simple in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with lile or no requirement for estimation from management. We did not identify any additional fraud risks. 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 maer section of in this report. 7. 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 financial statements and our audit knowledge. We have nothing material to add or draw aention to in relation to: – the directors’ confirmation within the Longer Term Viability Statement (page 50) that they have carried out a robust assessment of the emerging and principal risks facing the Company, 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 50) as to how they have assessed the prospects of the Company, 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 Company 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 aention to any necessary qualifications or assumptions. We are also required to review the Longer Term Viability Statement, set out on page 50 under the Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge. 8. 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 financial statements and our audit knowledge. Based on those procedures, we have concluded that each of the followingis materially consistent with the financial statements and our auditknowledge: – the directors’ statement that they consider that the annual report and 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 Commiee, including the significant issues that the audit commiee 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 eectiveness 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. 5. Fraud and breaches of laws and regulations – abilitytodetect (continued) 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 eect on the financial statements from our sector experience and through discussion with management (as required by auditing standards), and from inspection of the Company’s regulatory and legal correspondence, if any, and discussed with management the policies and procedures regarding compliance with laws and regulations. As the Company 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 Company is subject to laws and regulations that directly aect the 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 Company is subject to other laws and regulations where the consequences of non-compliance could have a material eect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or impacts on the Company’s ability to operate. We identified financial services regulation as being the area most likely to have such an eect, recognising the regulated nature of the Company’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 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 financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. 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. 6. 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 financial statements and our auditor’s report thereon. Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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. 9. We have nothing to report on other maers on which we are required to report by exception We have nothing to report in respect of the following maers 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 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. 10. Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 61, the directors are responsible for: the preparation of the 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 financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, maers 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 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 financial statements. A fuller description of our responsibilities is provided on the FRC s website at www.frc.org.uk/auditorsresponsibilities. 11. 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 maers we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permied 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 2022 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 72 73RTW Venture Fund Limited ![]() Statement of Assets and Liabilities as at 31 December 2021 and 31 December 2020 (Expressed in United States Dollars) 2021 US$ 2020 US$ Assets: Investments in securities, at fair value (cost at 31 December 2021: US$271,421,062; cost at 31 December 2020: US$151,961,275) 409,179,507 390,790,635 Derivative contracts, at fair value (cost at 31 December 2021: US$2,348,062; cost at 31 December 2020: US$1,763,991) 10,983,574 4,713,942 Cash and cash equivalents 6,484,057 4,553,481 Due from brokers 12,323,965 20,032,971 Receivable from unseled trades 200,695 685,498 Other assets 191,565 124,575 Total assets 439,363,363 420,901,102 Liabilities: Securities sold short, at fair value (proceeds at 31 December 2021: US$9,620,981; proceeds at 31 December 2020: US$4,986,163) 9,318,393 6,672,359 Derivative contracts, at fair value (proceeds at 31 December 2021: US$nil; proceeds at 31 December 2020: US$6,903) 3,310,833 579,782 Due to brokers 38,019,859 361,032 Accrued expenses 861,545 530,070 Payable for unseled trades 492,007 145,930 Total liabilities 52,002,637 8,289,173 Total net assets 387,360,726 412,611,929 Net assets aributable to Ordinary Shares (shares at 31 December 2021: 212,389,138; shares at 31 December 2020: 191,515,735) 363,040,222 375,281,126 Net assets aributable to Performance Allocation Shares (shares at 31 December 2021: 1; shares at 31 December 2020: 1) 24,320,504 37,330,803 NAV per Ordinary Share 1.7093 1.9595 The audited financial statements of the Company were approved and authorised for issue by the Board of Directors on 30 March 2022 and signed on its behalf by: William Simpson Chairman Paul Le Page Director See accompanying notes to the financial statements. Descriptions Number of Shares Cost US$ Fair Value US$ 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 financial statements. #### Condensed Schedule of Investments #### as at 31 December 2021 #### (Expressed in United States Dollars) Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 74 75RTW Venture Fund Limited ![]() Descriptions Number of Shares Cost US$ Fair Value US$ 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. Descriptions Cost US$ Fair Value US$ 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 financial statements. #### Condensed Schedule of Investments #### as at 31 December 2021 continued #### (Expressed in United States Dollars) Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 76 77RTW Venture Fund Limited ![]() Descriptions Cost US$ Fair Value US$ 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 3,07 7,81 6 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 financial statements. Descriptions Proceeds US$ Fair Value US$ 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 97,0 18 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 US$ 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 financial statements. #### Condensed Schedule of Investments #### as at 31 December 2021 continued #### (Expressed in United States Dollars) Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 78 79RTW Venture Fund Limited ![]() Descriptions Number of Shares Cost US$ Fair Value US$ Percentage of Net Assets % Investments in securities, at fair value Common stocks United States Healthcare Rocket Pharmaceuticals, Inc. 3,089,728 8,131,396 169,440,683 41.07 Others\* 97,062,100 176,270,298 42.72 Total United States 105,193,496 345,710,981 83.79 Canada Healthcare 3,891,345 2,360,037 0.57 Netherlands Healthcare 2,011,065 1,695,645 0.41 Cayman Islands Healthcare 749,216 938,398 0.23 British Virgin Islands Healthcare 226,450 383,740 0.09 China Healthcare 7,325 13,224 0.00 Total common stocks 112,078,897 351,102,025 85.09 Convertible preferred stocks United States Healthcare\* 23,972,095 23,591,822 5.72 United Kingdom Healthcare 7,4 02,6 14 7,707,415 1.87 Cayman Islands Healthcare 6,862,515 6,862,515 1.66 Ireland Healthcare 116,545 109,806 0.03 Total convertible preferred stocks 38,353,769 38,271,558 9.28 \*No individual investment security or contract constitutes greater than 5 percent of net assets. See accompanying notes to the financial statements. Descriptions Cost US$ Fair Value US$ Percentage of Net Assets % Investments in securities, at fair value (continued) American depository receipts Ireland Healthcare 1,093,043 1,004,772 0.24 Israel Healthcare 422,828 394,447 0.10 Cayman Islands Healthcare 12,738 17,833 0.00 Total American depository receipts 1,528,609 1,417,052 0.34 Total investments in securities, at fair value 151,961,275 390,790,635 94.71 Descriptions Cost US$ Fair Value US$ Percentage of Net Assets % Derivative contracts – assets, at fair value Warrants Canada Healthcare 1,589,508 2,721,084 0.66 United States Healthcare 155,991 209,900 0.05 Total warrants 1,745,499 2,930,984 0.71 Equity swaps United States Healthcare 13,412 859,586 0.21 British Virgin Islands Healthcare 3,873 846,117 0.20 Canada Healthcare 1,207 7 7, 255 0.02 Total equity swaps 18,492 1,782,958 0.43 Total derivative contracts – assets, at fair value 1,763,991 4,713,942 1.14 See accompanying notes to the financial statements. #### Condensed Schedule of Investments #### as at 31 December 2020 #### (Expressed in United States Dollars) Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 80 81RTW Venture Fund Limited ![]() Descriptions Proceeds US$ Fair Value US$ Percentage of Net Assets % Securities sold short, at fair value Common stocks United States Healthcare 4,541,074 6,229,135 1.51 Netherlands Healthcare 213,386 199,896 0.05 Canada Healthcare 58,823 78,292 0.02 Total common stocks 4,813,283 6,507,323 1.58 American depository receipts Israel Healthcare 149,412 147,203 0.04 Cayman Islands Healthcare 23,468 17,8 33 0.00 Total American depository receipts 172,880 165,036 0.04 Total securities sold short, at fair value 4,986,163 6,672,359 1.62 Descriptions Proceeds US$ Fair Value US$ Percentage of Net Assets % Derivative contracts – liabilities, at fair value Equity swaps United States 6,903 579,782 0.14 Healthcare Total derivative contracts – liabilities, at fair value 6,903 579,782 0.14 See accompanying notes to the financial statements. Statement of Operations For the year ended 31 December 2021 and 31 December 2020 (Expressed in United States Dollars) 2021 US$ 2020 US$ Investment income Interest (net of withholding taxes of US$nil 2020: US$nil) 363,673 70,291 Dividends (net of withholding taxes of US$123,894; 2020: US$nil) 294,027 83,814 Total investment income 657,700 154,105 Expenses Management fees 4,813,854 2,912,850 Professional fees 1,070,317 1,068,017 Listing fees 936,615 – Administrative fees 330,834 233,459 Audit fees 288,254 162,016 Directors’ fees 214,353 220,875 Research fees 237,984 130,489 Interest 215,606 73,545 Other expenses 346,867 305,856 Total expenses 8,454,684 5,107,107 Net investment income/(loss) (7,796,984) (4,953,002) Realised and change in unrealised gain/(loss) on investments, derivatives and foreign currency transactions Net realised gain/(loss) on securities and foreign currency transactions 41,280,297 8,3 37,42 2 Net change in unrealised gain/(loss) on securities and foreign currency translation (99,115,160) 159,009,990 Net realised gain/(loss) on derivative contracts (1,648,961) (2,880,680) Net change in unrealised gain/(loss) on derivative contracts 2,936,018 1,139,850 Net realised and unrealised gain/(loss) on investments, derivatives and foreign currency transactions (56,547,806) 165,606,582 Net increase/(decrease) in net assets resulting from operations (64,344,790) 160,653,580 See accompanying notes to the financial statements. #### Condensed Schedule of Investments #### as at 31 December 2020 continued #### (Expressed in United States Dollars) Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 82 83RTW Venture Fund Limited ![]() Statement of Changes in Net Assets For the year ended 31 December 2021 (Expressed in United States Dollars) Ordinary Share Class Fund US$ Performance Allocation Share Class Fund US$ Total Shareholders’ Funds US$ Net assets, beginning of year 375,281,126 37,330,803 412,611,929 Operations Net investment gain/(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 cost of US$222,883) 44,068,507 – 44,068,507 Performance Allocation distribution – (4,974,920) (4,974,920) Net change in net assets resulting from capital transactions 44,068,507 (4,974,920) 39,093,587 Net change in net assets (12,240,904) (13,010,299) (25,251,203) Net assets, end of year 363,040,222 24,320,504 387,360,726 See accompanying notes to the financial statements. Statement of Changes in Net Assets For the year ended 31 December 2020 (Expressed in United States Dollars) Ordinary Share Class Fund US$ Performance Allocation Share Class Fund US$ Total Shareholders’ Funds US$ Net assets, beginning of year 205,695,869 8,691,106 214,386,975 Operations Net investment gain/(loss) (4,953,002) – (4,953,002) Net realised gain/(loss) on securities and foreign currency transactions 8,3 37,42 2 – 8 ,337,422 Net change in unrealised gain/(loss) on securities and foreign currency translation 159,009,990 – 159,009,990 Net realised gain/(loss) on derivative contracts (2,880,680) – (2,880,680) Net change in unrealised gain/(loss) on derivative contracts 1,139,850 – 1,139,850 Performance Allocation (32,787,677) 32,787,677 – Net change in net assets resulting from operations 127,865,903 32,787,677 160,653,580 Capital transactions Issuance of Ordinary Shares (net of issuance costs of US$209,676) 41,719,354 – 41,719,354 Performance Allocation distribution – (4,147,980) (4,147,980) Net change in net assets resulting from capital transactions 41,719,354 (4,147,980) 37,571,374 Net change in net assets 169,585,257 28,639,697 198,224,954 Net assets, end of year 375,281,126 37,330,803 412,611,929 See accompanying notes to the financial statements. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 84 85RTW Venture Fund Limited ![]() Statement of Cash Flows For the year ended 31 December 2021 and 31 December 2020 (Expressed in United States Dollars) 2021 US$ 2020 US$ Cash flows from operating activities Net increase/(decrease) in net assets resulting from operations (64,344,790) 160,653,580 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 (41,280,297) (8,3 37,422) Net change in unrealised (gain)/loss on securities and foreign currency translation 99,115,160 (159,009,990) Net realised (gain)/loss on derivative contracts 1,648,961 2,880,680 Net change in unrealised (gain)/loss on derivative contracts (2,936,018) (1,139,850) Purchases of investments in securities (202,925,739) (117,412,482) Proceeds from sales of investments in securities 119,715,056 66,905,737 Proceeds from securities sold short 15,049,848 6,506,635 Payments for securities sold short (5,416,866) (2,306,452) Proceeds from derivative contracts (784,778) 1,222,986 Payments for derivative contracts (1,466,746) (5,785,761) Changes in operating assets and liabilities: Other assets (66,990) (118,767) (Receivable from)/payable for unseled trades 830,880 (1,072,270) Due to brokers 37,65 8,827 361,032 Accrued expenses 331,475 (130,162) Net cash provided by/(used in) operating activities (including restricted cash) (44,872,017) (56,782,506) Cash flows from financing activities Net proceeds from issuance of shares 44,068,507 41,719,354 Performance Allocation distribution (4,974,920) (4,147,980) Net cash provided by/(used in) financing activities 39,093,587 37,571,374 Net change in cash and cash equivalents (including restricted cash) (5,778,430) (19,211,132) Cash and cash equivalents (including restricted cash), beginning of the year 24,586,452 43,797,584 Cash and cash equivalents (including restricted cash), end of the year 18,808,022 24,586,452 At 31 December 2021, the amounts categorised in cash and cash equivalents (including restricted cash) include the following: Cash and cash equivalents 6,484,057 4,553,481 Due from brokers 12,323,965 20,032,971 Total cash and cash equivalents (including restricted cash) 18,808,022 24,586,452 Supplemental disclosure of cash flow information Cash paid during the year for interest 250,980 84,698 See accompanying notes to the financial statements. Notes to the Financial Statements For the year ended 31 December 2021 (Expressed in United States Dollars) 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. It 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 admied to trading on the Specialist Fund Segment of the London Stock Exchange under ticker symbol: RTW. Subsequently, on 6 August 2021, the Company’s Ordinary Shares were admied to trading on the Premium Segment of the London Stock Exchange under ticker symbol RTWG. The Company 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 the Investment Manager’s (as defined below) existing US-based funds. The Company focuses on creating, building, and supporting world-class life sciences, biopharmaceutical and medical technology companies. The Company’s investment objective is to generate aractive 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 Company appointed RTW Investments, LP, a Delaware limited partnership (the “Investment Manager”), to provide the Company 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 financial statements are expressed in United States Dollars. The financial statements which give a true and fair view and have been prepared in conformity with US generally accepted accounting principles (“US GAAP”) and are in compliance with the Companies (Guernsey) Law, 2008. The Company is an investment company and follows the accounting and reporting guidance in Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. Although the Company was in a net current liability position as at 31 December 2021, the Directors considered that it is appropriate to adopt a going concern basis of accounting in preparing the 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. The COVID-19 pandemic continues to be a risk to the global economy, and, although the impact of COVID-19 continues to be seen across the world, the implications for financial markets has begun to reduce, with equity volatilities improving. Although impeded by the discovery of the new Omicron variant in the fourth quarter of 2021, overall indices were in a beer position than at the start of 2021. Like the majority of companies, COVID-19 has had an impact on the Company’s operations but, at the height of the lockdowns in Guernsey andthe United States, the Investment Manager, Administrator and Sub-Administrator demonstrated that they were able to work remotely without any significant negative impact on the Company’s operations. While the ongoing implications of COVID-19 are still unknown, as of year-end, the movements in the market are encouraging but, should another new variant lead to further lockdowns this could change again. However, in part due to the successful vaccine roll-out, there is light at the end of the COVID-19 pandemic tunnel, and it is expected that the risk to the Company from it will continue to decrease throughout 2022. Although the COVID-19 pandemic could have a negative impact on investment valuations and on the volatility of investment valuations, it does not impact the ability of the Company to continue as a going concern. The impact of the COVID-19 pandemic is changing but the Directors consider that the Company is well placed to deal with challenges arising from the COVID-19 pandemic. Cash and cash equivalents (including restricted cash) Cash represents cash deposits held at financial institutions. Cash equivalents include short-term highly liquid investments of sucient 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 2021 and 31 December 2020, the Company 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 Company 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 Company 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 Company. Unobservable inputs reflect the Company’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 Company 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. – 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 (“NAV”) 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 aected 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 Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 86 87RTW Venture Fund Limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional Information exercised by the Company 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 dierent 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 Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company 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 Company 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 Company 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 NAV 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 indicated 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, the early development stage of each of the investments and the indicated enterprise value is discounted at an appropriate rate. The income approach utilizes the discounted cash flow method. Projected cash flows for each investment were discounted to determine an assumed enterprise value. Where applicable, the indicated enterprise value was 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 was 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 was allocated to the equity class on either a fully diluted basis or using an option pricing model. The resulting indicated value on a per share basis is then multiplied by the number of shares to derive the fair market value. American depository receipts The Company 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. 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 preferred stock The Company 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 2021, these investments are categorised in Level 1 and Level 3 of the fair value hierarchy. Investment in private investment companies The Company values investment in private investment companies using the net asset values provided by the underlying private investment companies as a practical expedient. The Company applies the practical expedient to its private investment companies on an investment-by-investment basis and consistently with the Company’s entire position in a particular investment, unless it is probable that the Company will sell a portion of an investment atan amount dierent from the NAV of the investment. 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 Company establishes valuation processes and procedures to ensure that the valuation techniques are fair and consistent, and valuation inputs are supportable. The Company designates the Investment Manager’s Valuation Commiee to oversee the entire valuation process of the Company’s investments. The Valuation Commiee comprises various members of the Investment Manager, including those separate from the Company’s portfolio management and trading functions, and reports to the Board. The Valuation Commiee is responsible for developing the Company’s wrien 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 Commiee meets on a monthly basis or more frequently, as needed, to determine the valuations of the Company’s Level 3 investments. Valuations determined by the Valuation Commiee 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 Company 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 Company engages the services of a third-party valuation firm, the Independent Valuer, to perform an independent review ofthe valuation of the Company’s Level 3 investments and may adjust its valuations based on the recommendations from the Investment Manager’s Valuation Commiee. 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 statement of operations. The Company does not isolate that portion of the results of operations arising from the eect 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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 selement dates on securities transactions; and the dierence between the amounts of dividends, interest, and foreign withholding taxes recorded on the Company’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. For the year ended 31 December 2020, realised gains and losses on investment transactions were determined using cost calculated on a first in, first out basis. However, with eect from 1 January 2021, realised gains and losses on investment transactions have been calculated on a specific identification method. The change in accounting policy was made in order to achieve a more favorable tax outcome for shareholders. It is impracticable to determine the cumulative eect of applying the change in accounting policy through retrospective application on prior periods owing to the change in Administrator during the year, hence the change was made prospectively as of the earliest date practicable, 1 January 2021. Note that, following the change, there is no eect on either the Company’s net assets as at 31 December 2021 or net increase/(decrease) in net assets resulting from operations for the year then ended and the Directors are of the opinion that any retrospective application of this change would not be material to the prior period reported results. 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 Company’s understanding of the applicable country’s rules and rates. Oseing of amounts related to certain contracts Amounts due from and to brokers are presented on a net basis, by counterparty, to the extent the Company has the legal right to oset the recognised amounts and intends to sele on a net basis. The Company has elected not to oset 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 neing arrangement. At 31 December 2021, the Company had cash collateral receivables of US$12,228,870 (31 December 2020: US$5,191,837) (see Note 3) with derivative counterparties under the same master neing arrangement. Income taxes The Company is exempt from taxation in Guernsey and is charged an annual exemption fee of £1,200. The Company 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 Company is managed so as not to be resident in the UK for UK tax purposes and as a foreign limited partnership for US tax purposes and provides full tax reporting for its US shareholders. The Company 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 Company 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 Company’s financial statements. Income tax and related interest and penalties would be recognised as a tax expense in the statement of operations if the tax position was deemed to meet the more likely than not threshold. The Investment Manager has analysed the Company’s tax positions and has concluded no liability for unrecognised tax benefits should be recorded in relation 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. Prior to re-domiciliation the Company did not record a provision for US federal, state, or local income taxes because the participating members reported their share of the Company’s income or loss on their income tax returns. The Company files an income tax return in the US federal jurisdiction, and may have to file income tax returns in various US states andforeign jurisdictions. Generally, the Company was subject to income tax examinations by major taxing authorities for the tax period since inception. Based on its analysis, the Company determined that it had not incurred any liability for unrecognised tax benefits as of 31 December 2021 or 31 December 2020. 1. Nature of operations and summary of significant accounting policies (continued) Annual Report and Accounts 202188 89RTW Venture Fund Limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional Information Use of estimates Preparing 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 financial statements and the reported amounts of income and expenses during the reporting period. Actual results could dier from those estimates. New accounting pronouncements There were no new accounting pronouncements required to be adopted by the Company during the year. 2. Fair value measurements The Company’s assets and liabilities recorded at fair value have been categorised based upon a fair value hierarchy as described in the Company’s significant accounting policies in Note 1. The following table presents information about the Company’s assets and liabilities measured at fair value as of 31 December 2021: Level 1 US$ Level 2 US$ Level 3 US$ Investments measured at net asset value\* Total US$ Assets (at fair value) Investments in securities Common stocks 249,490,511 16,001,524 1,943,967 – 267,4 36,0 02 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 ,0 47, 2 24 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 Company’s investment in private investment companies that are valued at their net asset value are not categorized within the fair value hierarchy. The following table presents information about the Company’s assets and liabilities measured at fair value as of 31 December 2020: Level 1 US$ Level 2 US$ Level 3 US$ Total US$ Assets (at fair value) Investments in securities Common stocks 307,923,358 34,091,286 9,087,3 81 351,102,025 Convertible preferred stocks 109,806 – 38,161,752 38,271,558 American depository receipts 1,417,052 – – 1 ,41 7,0 52 Total investments in securities 309,450,216 34,091,286 47,249,133 390,790,635 Derivative contracts Warrants 75,917 2,721,084 133,983 2,930,984 Equity swaps – 1,782,958 – 1,782,958 Total derivative contracts 75,917 4,504,042 133,983 4,713,942 309,526,133 38,595,328 47,383,116 395,504,577 Liabilities (at fair value) Securities sold short Common stocks 6,507,323 – – 6,507,323 American depository receipts 165,036 – – 165,036 Total securities sold short 6,672,359 – – 6,672,359 Derivative contracts Equity swaps – 579,782 – 579,782 Total derivative contracts – 579,782 – 579,782 6,672,359 579,782 – 7,252,141 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 2021, the Company had transfers into Level 2 of US$9,064,760 from Level 3 due to conversion into publicly traded common stocks subject to an unexpired 180-day lock-up as at 31 December 2021 (2020: US$9,002,481) and transfers into Level 1 of US$20,330,984 from Level 3 due to conversion into publicly traded common stocks (2020: US$4,999,996). During the year ended 31 December 2021, US$8,210,689 (2020: US$nil) relating to investment companies measured using NAV as a practical expedient and which are not categorized in the fair value hierarchy, was transferred out of Level 3. Transfers between levels are deemed to occur at year end. 2. Fair value measurements (continued) Annual Report and Accounts 202190 91RTW Venture Fund Limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional Information The following tables summarise the valuation techniques and significant unobservable inputs used for the Company’s investments that are categorised within Level 3 of the fair value hierarchy as of 31 December 2021 and 31 December 2020: Fair value at 31 December 2021 US$ 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 up step 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 up step 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 Fair value at 31 December 2020 US$ Valuation techniques Significant unobservable inputs Range of inputs Assets (at fair value) Investments in securities Convertible preferred stocks 20,777,728 Price of most recent funding round n/a n/a 17,384,024 Discounted cash flows, option pricing model WACC 28%–42% Exit revenue multiple 4x Expected volatility 50%–80% Common stocks 8,741,068 Price of most recent funding round n/a n/a 346,313 Discounted cash flows, option pricing model Expected volatility 95% Total investments in securities 47,249,133 Derivative contracts Warrants 133,983 Price of most recent funding round n/a n/a Total derivative contracts 133,983 The significant unobservable inputs used in the fair value measurements of Level 3 convertible preferred stocks are WACC, exit revenue multiple, and expected volatility. Increases in the WACC in isolation would result in a lower fair value for the security, and vice versa. Increases in the exit multiple 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 on the following page 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 Company 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 aributable to both observable and unobservable inputs 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 US$ Realised gains/ (losses) (a) US$ Change in Unrealised gains/(losses) (a) US$ Purchases US$ Sales US$ Transfers into/ (from) Level 3\* US$ Ending balance 31 December 2021 US$ 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) 67,1 7 7, 270 Common stocks 9,087,3 81 – 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 assets and liabilities measured at fair value for the year ended 31 December 2020 were as follows: Balance beginning 1January 2020 US$ Realised gains/ (losses) (a) US$ Change in Unrealised gains/(losses) (a) US$ Purchases US$ Sales US$ Transfers into/ (from) Level 3\* US$ Ending balance 31 December 2020 US$ Assets (at fair value) Investments in securities Convertible preferred stocks 26,064,551 – (640,023) 28,972,718 (3,000,004) (13,235,490) 38,161,752 Convertible notes – – – 762,640 – (762,640) – Common stocks – – 125,210 8,966,519 – (4,348) 9,087, 381 Total investments in securities 26,064,551 – (514,813) 38,701,877 (3,000,004) (14,002,478) 47,249,133 Derivative contracts Warrants – – – 133,983 – – 133,983 Total derivative contracts – – – 133,983 – – 133,983 \* Conversions of preferred stock and convertible notes into common stock. (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 statement of operations. Changes in Level 3 unrealised gains and losses during the year for assets still held at year end were as follows: 2021 US$ 2020 US$ Convertible preferred stocks 12,873,757 (640,023) Common stocks 497,9 66 125,210 Change in unrealised gains and losses during the year for assets still held at year end 13,371,723 (514,813) Total realised gains and losses and unrealised gains and losses in the Company’s investment in securities, derivative contracts and securities sold short are made up of the following gain and loss elements: 2021 US$ 2020 US$ Realised gains 54,163,408 17,159,030 Realised losses (14,532,072) (11,702,288) Net realised gain on securities, derivative contracts and securities sold short 39,631,336 5,456,742 2021 US$ 2020 US$ Change in unrealised gains 106,379,343 218,626,449 Change in unrealised losses (202,558,485) (58,476,609) Net change in unrealised gain/(loss) on securities, derivative contracts and securities sold short (96,179,142) 160,149,840 As at 31 December 2021, the Company had commitments (subject to completion of certain parameters) to certain of its investments totaling US$2,358,325. 2. Fair value measurements (continued) Annual Report and Accounts 202192 93RTW Venture Fund Limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional Information 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. At 31 December 2021, amounts included within due from brokers of US$95,095 (31 December 2020: US$14,841,134) can be used for investment. The Company pledged cash collateral to counterparties to over-the-counter derivative contracts of US$12,228,870 (31 December 2020: US$5,191,837) which isincluded in due from brokers. In the normal course of business, substantially all of the Company’s securities transactions, money balances, and security positions are transacted with the Company’s prime brokers, Goldman Sachs & Co. LLC, Cowen Financial Products, LLC, UBS AG, Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, Jeries & Co. and J.P. Morgan Securities, LLC. The Company 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 Company’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 Company 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 Company’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 Company is also subject to additional counterparty risk due to the inability of its counterparties to meet the terms of their contracts. Warrants The Company may receive warrants from its portfolio companies upon an investment in the debt or equity of a portfolio company. The warrants provide the Company 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 Company to lose its entire investment in a warrant. The Company is exposed to counterparty risk from the potential failure of an issuer of warrants to sele its exercised warrants. The maximum risk of loss from counterparty risk to the Company is the fair value of the contracts and the purchase price of the warrants. The Company considers the eects of counterparty risk when determining the fair value of its investments in warrants. Equity swap contracts The Company is subject to equity price risk in the normal course of pursuing its investment objectives. The Company 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 Company 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. Volume of derivative activities The Company 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 2021: Primary underlying risk 31 December 2021 31 December 2020 Long exposure Short exposure Long exposure Short exposure Notional amounts US$ Notional amounts US$ Notional amounts US$ Notional amounts US$ Equity price Equity swaps 2,3 47,6 07 – 5,756,513 7,117,933 Warrants (a) 9,031,998 66,149,127 1,487,443 – 11,379,605 66,149,127 7,243,956 7,117,933 (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 statement of assets and liabilities and statement of operations The following tables identify the fair value amounts of derivative instruments included in the statement of assets and liabilities as derivative contracts, categorised by primary underlying risk, at 31 December 2021 and 31 December 2020. The following table also identifies the gain and loss amounts included in the 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 2021 and 31 December 2020. 4. Derivative contracts (continued) Primary underlying risk 31 December 2021 Derivative assets US$ Derivative liabilities US$ Realised gain/ (loss) US$ Change in unrealised gain/ (loss) US$ 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 Primary underlying risk 31 December 2020 Derivative assets US$ Derivative liabilities US$ Realised gain/ (loss) US$ Change in unrealised gain/ (loss) US$ Equity price Equity swaps 1,782,958 579,782 – 1,185,485 Warrants 2,930,984 – (2,880,680) (45,635) 4,713,942 579,782 (2,888,680) 1,139,850 5. Securities lending agreements The Company has entered into securities lending agreements with its prime brokers. From time to time, the prime brokers lend securities on the Company’s behalf. As of 31 December 2021 and 31 December 2020, no securities were loaned and no collateral was received. 6. Oseing assets and liabilities The Company is required to disclose the impact of oseing assets and liabilities represented in the statement of assets and liabilities to enable users of the financial statements to evaluate the eect or potential eect of neing 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 neing arrangement or similar agreement or meet the following right of seto criteria: the amounts owed by the Company to another party are determinable, the Company has the right to oset the amounts owed with the amounts owed by the other party, the Company intends to oset and the Company’s right of seto are enforceable by law. As of 31 December 2021 and 31 December 2020, the Company held financial instruments and derivative instruments that were eligible for oset in the statement of assets and liabilities and are subject to a master neing arrangement. The master neing arrangement allows the counterparty to net applicable collateral held on behalf of the Company against applicable liabilities or payment obligations of the Company to the counterparty. These arrangements also allow the counterparty to net any of its applicable liabilities or payment obligations they have to the Company against any collateral sentto the Company. As discussed in Note 1, the Company has elected not to oset assets and liabilities in the statement of assets and liabilities. The following table presents the potential eect of neing arrangements for asset derivative contracts presented in the statement of assets and liabilities: Description Gross amounts of recognised assets Gross amounts oset in the statement of assets and liabilities Gross amounts of recognised assets and liabilities 31 December 2021 Gross amounts not oset 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 ( 7 7, 393) – 229,167 Jeries & 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 Annual Report and Accounts 202194 95RTW Venture Fund Limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional Information Description Gross amounts of recognised assets Gross amounts oset in the statement of assets and liabilities Gross amounts of recognised assets and liabilities 31 December 2020 Gross amounts not oset in the statement of assets and liabilities Net amount Financial instruments (a) Cash collateral received (b) Equity swaps Cowen Financial Products, LLC 1,487,760 – 1,487,760 (296,372) – 1,191,388 UBS AG 323,371 – 323,371 (60,876) – 262,495 Bank of America Merrill Lynch 32,659 – 32,659 (32,659) – – 1,843,790 1,843,790 (389,907) – 1,453,883 (a) Amounts related to master neing agreements (e.g. ISDA), determined by the Company to be legally enforceable in the event of default and if certain other criteria are met in accordance with applicable oseing accounting guidance but were not oset due to management’s accounting policy election. (b) Amounts related to master neing agreements and collateral agreements determined by the Company to be legally enforceable in the event of default, but certain other criteria are not met in accordance with applicable oseing accounting guidance. The collateral amounts may exceed the related net amounts of financial assets and liabilities presented in the 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. The following tables present the potential eect of neing arrangements for liability derivative contracts presented in the statement of assets and liabilities as of 31 December 2021 and 31 December 2020: Description Gross amounts of recognised liabilities Gross amounts oset in the statement of assets and liabilities Gross amounts of recognised liabilities 31 December 2021 Gross amounts not oset 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) – – Jeries & Co. 406,977 – 406,977 (78,710) (328,267) – UBS AG 103,618 – 103,618 (16,060) (87,5 58) – Morgan Stanley & Co. LLC 7 7,39 3 – 7 7,393 (77,393) – – 3,310,833 – 3,310,833 (2,895,008) (415,825) – Description Gross amounts of recognised liabilities Gross amounts oset in the statement of assets and liabilities Gross amounts of recognised liabilities 31 December 2020 Gross amounts not oset in the statement of assets and liabilities Net amount Financial instruments (a) Cash collateral pledged (b) Equity swaps Cowen Financial Products, LLC 296,372 – 296,372 (296,372) – – UBS AG 60,876 – 60,876 (60,876) – – Bank of America Merrill Lynch 284,370 – 284,370 (32,659) – 251,711 641,618 – 641,618 (389,907) – 251,711 (a) Amounts related to master neing agreements (e.g. ISDA), determined by the Company to be legally enforceable in the event of default and if certain other criteria are met in accordance with applicable oseing accounting guidance but were not oset due to management’s accounting policy election. (b) Amounts related to master neing agreements and collateral agreements determined by the Company to be legally enforceable in the event of default, but certain other criteria are not met in accordance with applicable oseing accounting guidance. The collateral amounts may exceed the related net amounts of financial assets and liabilities presented in the 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 Company is subject to certain inherent risks arising from its investing activities of selling securities short. The ultimate cost to the Company to acquire these securities may exceed the liability reflected in these financial statements. 8. Risk factors Some underlying investments may be deemed to be a highly speculative investment and are not intended as a complete investment program. The Company is designed only for sophisticated persons who are able to bear the economic risk of the loss of their entire investment in the Company and who have a limited need for liquidity in their investment. The following risks are applicable to the Company: 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 Company’s investments and/or on the fair value of the Company’s investments. Such events are beyond the Company’s control, and the likelihood they may occur and the eect on the Company cannot be predicted. The Company 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 Company’s holdings in public Portfolio Companies could be aected 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 Company 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. 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 eect 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 eect on the Company’s financial condition. Portfolio Companies may not successfully translate promising scientific theory into a commercially viable business opportunity. Further, the 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 aect 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 Company may not make an investment or a series of investments in aPortfolio Company that result in the Company’s aggregate investment insuch Portfolio Company exceeding 15 per cent. of the Company’s gross assets, save for Rocket for which the limit will be 25 per cent. as stated in the Company’s prospectus. Each of these investment restrictions will be calculated as at the time of investment. As such, it is possible that the Company’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 Company’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 Company maintains its cash balances in financial institutions, which at times may exceed US federal or UK insured limits, as applicable. The Company 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 Company 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 selement 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 eort to mitigate such risks, the Company will aempt to limit its transactions to counterparties which are established, well capitalised andcreditworthy. Liquidity risk Liquidity risk is the risk that the Company cannot meet its financial commitments as they fall due.The Company’s unquoted investments may have limited or no secondary market liquidity so the Investment Manager maintains a sucient balance of cash and market quoted securities which can be sold if needed to meet its commitments. The Company’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 Company 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 aect, amongst other things, the value of the Portfolio Company or the Company’s investment in such Portfolio Company, or any distributions received from the Portfolio Company. Under its investment policy, the Company 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. 6. Oseing assets and liabilities (continued) Annual Report and Accounts 202196 97RTW Venture Fund Limited ![]() Notes to the Financial Statements continued Governance ReportStrategic Report Financial Statements Additional Information 9. Share capital During the year the Company issued 20,873,403 Ordinary Shares, as follows: 2021 2020 Number of Ordinary Shares Number of Ordinary Shares As at 1 January 191,515,735 161,544,695 Issuance of Ordinary Shares 20,873,403 29,971,040 As at 31 December 212,389,138 191,515,735 Ordinary Shares carry the right to receive all income of the Company aributable 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 aend 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 aorney 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. The Performance Allocation Amount will be allocated to the Performance Allocation Share Class Fund. All Performance Allocation Shares are held by RTW Venture Performance, LLC. As at 31 December 2021, there is one Performance Allocation Share in issue (31 December 2020: one). Performance Allocation Shares shall carry the right to receive, and participate in, any dividends or other distributions of the Company available for dividend or distribution. Performance Allocation Shares shall not be entitled to receive notice of, to aend or to vote at general meetings of the Company. Management Shares shall not be entitled to receive, and participate in, any dividends or other distributions of the Company available for dividend or distribution. Management Shares shall be entitled to receive notice of, to aend or to vote at general meetings of the Company. Upon admission the Management shares of the Company were compulsorily redeemed by the Directors for nil consideration. 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 Company. 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 Company. 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 Company (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 amounted to US$4,813,854 (31 December 2020: US$2,912,850) of which US$nil (31 December 2020: US$nil) was outstanding at the year end. Performance Allocation The Articles provide that in respect of each Performance Allocation Period, the Performance Allocation Amount shall be allocated to the Performance Allocation Share Class Fund, subject to the satisfaction of a hurdle condition. The Performance Allocation Amount relating to the Performance Allocation Period 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 Fund 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 Fund entered into a leer agreement dated 21 April 2020, pursuant to which the Performance Allocation Share Class Fund agreed to defer distributions of the Company’s Ordinary Shares that would otherwise be distributed to the Performance Allocation Share Class Fund no later than 30 business days aer the publication of the Company’s audited annual financial statements. Under that leer agreement, such Ordinary Shares shall be distributed to the Performance Allocation Share Class Fund at such time or times as determined by the Board of Directors of the Company. #### Notes to the Financial Statements #### continued The Company will increase or decrease the amount owed to the Performance Allocation Share Class Fund based on its investment exposure to the Company’s performance had such Performance Ordinary Shares been so issued. The Performance Allocation Amount for the year ended 31 December 2021 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 US$3,559,670 in 2021. Additionally, there was a reallocation of the uncrystallized performance allocation back to Ordinary Shareholders of US$4,475,709 related to the Company’s performance in the year. Together with the Notional Ordinary Shares mark-to-market loss of US$3,559,670, the total period to date performance allocation reversal is US$8,035,379, which is incorporated into the value of the 31 December 2021 Performance Allocation balance of US$24,320,504. Until the Company makes a distribution of Ordinary Shares to the Performance Allocation Share Class Fund, the Company will have an unsecured discretionary obligation to make such distribution at such time or times as the Board of Directors of the Company determines. RTW Venture Performance, LLC has agreed to the deferral of the distributions of the Company’s Ordinary Shares in connection with its own tax planning. The Company does not believe that the deferral of such distributions to the Performance Allocation Share Class Fund will have any negative eects on holders of the Company’s Ordinary Shares. The Investment Manager is a member of the Performance Allocation Share Class Fund, and will therefore receive a proportion of the Performance Allocation Amount. In May 2021, the Board approved a cash distribution of US$4,974,920 to the Performance Allocation Share Class Fund (31 December 2020: US$4,147,980). At the year end the Performance Allocation was US$24,320,504 (31 December 2020: US$37,330,803). The Investment Manager is also refunded any research costs incurred on behalf of the Company. One of the Directors of the Company, Stephanie Sirota, is also a partner and the Chief Business Ocer of the Investment Manager. The following table represents the number of related parties who served on the board of directors of investments held by the Company during the year ended 31 December 2021 and 31 December 2020: Investments Partners Employees Rocket Two (a) One HSAC2 Holdings II Two (a) One Ji Xing One (b) One RTW Royalty (#1) – One RTW Royalty (#2) – One Yarrow Biotechnology One (b) One (a) Roderick Wong, Naveen Yalamanchi (b) Roderick Wong. As at 31 December 2021, the number of Ordinary Shares held by each Director was as follows: 2021 2020 Number of Ordinary Shares Number of Ordinary Shares William Simpson 150,000 100,000 Paul Le Page 103,000 103,000 William Sco 150,000 100,000 Stephanie Sirota 1,000,000 763,004 William Simpson added to his holding during the year by purchasing 50,000 Ordinary Shares in the Company’s share issuance programme at a premium toNAV. Stephanie Sirota added to her holding during the year by purchasing 236,996 Ordinary Shares in the Company’s share issuance programme at a premium to NAV. William Sco added to his holding during the year by purchasing 50,000 Ordinary Shares in the Company’s share issuance programme ata premium to NAV. Roderick Wong is a major shareholder and also a member of the Investment Manager. As at 31 December 2021, he held 29,218,773 (13.76% of the Ordinary Shares in issue) (31 December 2020: 27,286,368, 14.25% of the Ordinary Shares in issue) Ordinary Shares in the Company. The total Directors’ fees expense for the year amounted to US$214,353 (31 December 2020: US$220,875) of which US$52,761 was outstanding at 31 December 2021 (31 December 2020: US$53,136), included within accrued expenses. 11. Administrative services On 1 February 2021, Elysium Fund Management Limited (“EFML”) was appointed as Administrator, taking over the administration, corporate secretarial, corporate governance and compliance services from Ocorian Administration (Guernsey) Limited (“OAGL”). Further, from 1 February 2021 Morgan Stanley Fund Services USA LLC (“MSFS”) was appointed to serve as the Company’s Sub-Administrator. During the year EFML and MSFS charged administration fees of US$107,767 and US$223,067 respectively (2020: OAGL charged US$233,459) of which US$8,396 and US$76,053 (2020: US$51,947 was outstanding to OAGL) was outstanding at 31 December 2021, and is included within accrued expenses. Annual Report and Accounts 202198 99RTW Venture Fund Limited Annual Report and Accounts 202199 RTW Venture Fund limited ![]() #### Notes to the Financial Statements #### continued Governance ReportStrategic Report Financial Statements Additional information 12. Financial highlights Financial highlights for the year ended 31 December 2021 and 31 December 2020 are as follows: 2021 2020 Per Ordinary Share operating performance Net Asset Value, beginning of year US$ 1.96 US$ 1.27 Issuance of Ordinary Shares 0.02 0.02 Income from investments Net investment income/(loss) (0.04) (0.03) Net realised and unrealised gain/(loss) on investments, derivatives and foreign currency transactions (0.23) 0.70 Total from investment operations (0.27) 0.67 Net Asset Value, end of year US$ 1.71 US$ 1.96 Total return Total return before Performance Allocation (15.35)% 62.35% Performance Allocation 2.58% (8.46)% Total return aer Performance Allocation (12.77)% 53.89% Ratios to average net assets\* Expenses 2.22% 2.11% Performance Allocation (2.11)% 13.56% Expenses and Performance Allocation 0.11% 15.67% Net investment income/(loss) (2.04)% (2.05)% NAV total return for the year (15.35)% 62.35% \* The Company’s annualised ongoing charges ratio is 1.78%, calculated in accordance with the AIC recommended methodology, which excludes non-recurring costs and uses the average NAV in its calculation. Financial highlights are calculated for Ordinary Shares. An individual shareholder’s financial highlights may vary based on participation in new issues, dierent Performance Allocation arrangements, and the timing of capital share transactions. Net investment income/loss does not reflect the eects of the Performance Allocation. 13. Subsequent events On 6 January 2022, CinCor announced pricing of its US$193.6 million IPO, by oering 12.1 million shares at US$16.00 per share. The shares began trading on Nasdaq Global Market on 7 January 2022 under ticker “CINC”. These financial statements were approved by the Board of Directors and available for issuance on 30 March 2022. Subsequent events have been evaluated through this date. 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 Guernsey Financial Services Commission (“GFSC”) as a Registered Closed-ended Collective Investment Scheme and is an investment company limited by shares. The registered oce 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 admied 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”. The Company’s Ordinary Shares were admied to trading on the Premium Segment of the London Stock Exchange with eect from 6 August 2021. Investment Objective The Company 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 Company seeks to achieve its investment objective by leveraging RTWInvestments, LP’s (the “Investment Manager”) data-driven proprietary pipeline of innovative assets to invest in LifeSci 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 Company is able to build a dierentiated, sustainable business to address said unmet need. The Company expects to invest approximately 80 per cent. of its gross assets in the investments to be made in the biopharmaceutical sector and approximately 20 per cent. of its gross assets in the investments to be made in the medical technology sector. The Company’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 Company’s gross assets and grow over time, as the Company 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 Company’s gross assets. The Company 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 Company 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 Companies. Monetisation events such as IPOs and reverse mergers will not necessarily represent exit opportunities for the Company. Rather, the Company may decide to retain all or some of its investment in such Portfolio Companies where they continue to meet the standard of diligence set by the Investment Manager. The Company is not required to allocate a specific percentage of its assets to Private Portfolio Companies or Public Portfolio Companies. The Company also intends, where appropriate, to invest further in its Portfolio Companies, supporting existing investments throughout their lifecycle. The Company may divest its interest in Portfolio Companies in part or in full when the risk–reward trade-o is deemed to be less favourable. From time to time, the Company may seek opportunities to optimise investing conditions, and to allow for such circumstances, the Company 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 Company will be subject to the following restrictions when making investments in accordance with its investment policy: – the Company may not make an investment or a series of investments in aPortfolio Company that result in the Company’s aggregate investment insuch Portfolio Company exceeding 15 per cent. (or, in the case of Rocket Pharmaceuticals, Inc., 25 per cent.) of the Company’s gross assets at the time of each such investment; – the Company 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 aer 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 Company’s gross assets), there will be no requirement to sell or otherwise dispose of any investment (in whole or in part). #### General company information #### Investment Objective and Investment Policy Governance ReportStrategic Report Financial Statements Additional Information 101Annual Report and Accounts 2021100 RTW Venture Fund Limited 100 ![]() Leverage and borrowing limits The Company will have no leverage as at the date of Admission but 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 per cent. of the Company’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 Company’s underlying investments. Capital deployment The Company anticipates that it will initially, upon Admission and upon any subsequent capital raises, invest up to 80 per cent. 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 laer become available. Cash management The Company’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 Company may seek opportunities to optimise investing conditions, and to allow for such circumstances, there will be no limitations placed on the Company’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 Company 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; “Acelyrin” Acelyrin. Inc.; “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 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 aacks a body tissue; “Avidity” Avidity Biosciences, Inc.; “Beta Bionics” Beta Bionics, Inc.; “Biomea” Biomea Fusion, Inc.; “BLA” or “Biological License Application” a request for permission to introduce, or deliver for introduction, a biologic product into interstate commerce; “C4 Therapeutics” or “C4T” C4 Therapeutics, Inc.; “Cardiac myosin” a target of the treatment development for a cardiovascular condition; “Cardiovascular disease” conditions aecting 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 ecacy. 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; “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 oce 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; “Corporate Brokers” being Barclays and J.P. Morgan Cazenove, until February 2022, when BofA Securities was appointed and Barclays ceased to act for the Company; “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; “Dravet Syndrome” a type of rare paediatric epilepsy; “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; “FDA Breakthrough Device Designation” a process designed to facilitate the development and expedite the review of the device that provides a more eective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions; “FDA Breakthrough Drug Designation” a process designed to expedite the development and review of drugs which may demonstrate substantial improvement over available therapy; “FDA Fast Track designation” a process designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need; “FRC” the Financial Reporting Council; GlossaryGeneral company information Investment Objective and Investment Policy continued Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 102 103RTW Venture Fund Limited ![]() “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 February 2016; “GH Research” GH Research PLC; “HCM” or “Hypertrophic cardiomyopathy” a cardiovascular disease characterized by an abnormally thick heart muscle; “Immunocore” Immunocore Limited; “InBrace” InBrace or Swi 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; “Inivata” Inivata Ltd; “Interim Report” the interim (half-yearly) report and financial statements; “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 oering; “IRR” internal rate of return; “ISDA” International Swaps and Derivatives Association; “iTeos” iTeos Therapeutics, Inc.; “JIXING” Ji Xing Pharmaceuticals, formerly China New Co; “Kyverna” Kyverna Therapeutics, Inc.; “Landos” Landos Biopharma, Inc.; “Lentiviral vector or “LV V” 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.; “Magnolia Medical” or “Magnolia” Magnolia Medical Technologies, Inc.; “Medtech” medical technology sector within healthcare; “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 aects 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.; “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.; “Ocial List” the ocial list of the UK Listing Authority; “Oligonucleotides” or “Oligos” a 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; “Ophthalmic conditions” conditions aecting 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 Fund in such amounts and as such times as shall be determined by the Board; #### Glossarycontinued “Performance Allocation Period” the First Performance Allocation Period and/or a subsequent Performance Allocation Period, as the context so requires; “Performance Allocation Share Class Fund” a class fund for the 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; “Performance Allocation Shareholder” the holder of Performance Allocation Shares; “POI Law” The Protection of Investors (Bailiwick of Guernsey) Law, 2020 “Portfolio Companies” Private and public companies included into the portfolio; “Premium Segment” Premium Segment of the Main Market of the LSE; “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); “Pulmonary conditions” pathologic conditions that aect lungs; “Pulmonx” Pulmonx Corporation; “Pyruvate Kinase Deficiency” or “PKD” a rare genetic disorder aecting red blood cells; “Pyxis” Pyxis Oncology, Inc.; “Rare disease” a disease that aects 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; “Russell 2000 Biotech” a stock index of small cap biotechnology and pharmaceutical companies; “SEC Rule 144” selling restricted and control securities; “SFS” Specialist Fund Segment of the London Stock Exchange; “Small molecule” a compound that can regulate a biologic activity; “Tachycardia” a heart rhythm disorder; “Tarsus” Tarsus, Inc.; “Tenaya” Tenaya Therapeutics. Inc.; “Third Harmonic Bio” Third harmonic Bio, 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; “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 Commiee” Valuation Commiee 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. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 104 105RTW Venture Fund Limited ![]() APM Definition Purpose Calculation Cash Cash held by the Company’s Bankers, Prime Broker and an ISDA counterparty. A measure of the Company’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 share The Company's NAV divided by the number of Ordinary Shares. A measure of the value of one Ordinary Share. The net assets aributable to Ordinary Shares on the statement of financial position (US$363.0m) 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 ocial 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$1.71) and the NAV per share at the beginning of the period (US$1.96) 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$1.78) and the price per share at the beginning of the period (US$1.88) minus one 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$1.78) and the NAV per share at the end of the period (US$1.71) minus one expressed as a percentage. Ongoing charges ratio The recurring costs that the Company has incurred during the period excluding performance fees and one o legal and professional fees expressed as a percentage of the Company’s average NAV for the period. A measure of the minimum gross profit that the Company needs to produce to make a positive return for shareholders. Calculated in accordance with the AIC methodology detailed on the web link below. hps://www.theaic.co.uk/sites/ default/files/documents/ AICOngoingChargesCalculation May12.pdf Ongoing Charges 2021 US$ 2020 US$ Fees to Investment Manager 4,813,854 2,912,850 Legal and professional fees 1,070,317 1,068,017 Listing fees 936,615 – Administration fees 330,834 233,459 Director’s remuneration 214,353 220,875 Audit fees 288,254 162,016 Ongoing expenses 800,457 509,890 Total expenses 8,454,684 5,107,107 Non-recurring expenses (1,176,627) (18,331) Total ongoing expenses 7, 278,057 5,088,776 Average NAV 408,929,032 241,755,741 Annualised Ongoing charges (using AIC methodology) 1.78 % 2.10 % #### Alternative Performance Measures 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 sta working for the Investment Manager for the year to 31 December 2021. Amount of remuneration paid The Investment Manager paid the following remuneration to sta in respectof the financial year ending on 31 December 2021 in relation to workon the Company. 2021 US$’000 2020 US$’000 Fixed remuneration 590 451 Variable remuneration 1,004 962 Total remuneration 1,594 1,413 Number of beneficiaries 56 36 The amount of the aggregate remuneration paid (or to be paid) by the Investment Manager to its partners which has been aributed to the Company in respect of the financial year ending on 31 December 2021 wasUS$33.6 million (2020: US$21.3 million). The amount of the total remuneration paid by the Investment Manager to members of its sta whose actions have a material impact on the risk profile of the Company which has been aributed to the Company in respect of financial year ending on 31 December 2021 was US$29.6 million (2020: US$18.9 million). #### AIFMD Disclosures unaudited 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 aendant 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 2021 2020 2021 2020 Leverage ratio 129% 102% 129% 102% Other risk disclosures The risk disclosures relating to risk framework and risk profile of the Company are set out in note 8 to the Financial Statements on page 97 andthe principal risks and uncertainties on pages 48 to 49. 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 financial statements) to this information requiring disclosure. Governance ReportStrategic Report Financial Statements Additional Information Annual Report and Accounts 2021 106 107RTW Venture Fund Limited ![]() Board of Directors William Simpson (Chairman) Paul Le Page (Chairman of Audit Commiee) William Sco Stephanie Sirota Investment Manager and AIFM RTW Investments, LP 40 10th Avenue Floor 7 New York NY 10014 United States of America Registered oce\* 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\*\* 1585 Broadway New York NY 10036 United States of America Registrar Link Market Services (Guernsey) Limited Mont Crevelt House Bulwer Avenue St Sampson Guernsey GY2 4LH 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 PO Box 98 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 #### Schedule of Key Service Providers 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 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 Website: www.rtwfunds.com/venture-fund Identifiers: ISIN: GG00BKTRRM22 SEDOL: BKTRRM2 / BNNXVW5 Ticker: RTW / RTWG LEI: 549300Q7EXQQH6KF7Z84 \* on 1 February 2021, the registered oce address of the Company changed from PO Box 286, Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY \*\* appointed on 1 February 2021, aer Ocorian Administration (Guernsey) Limited resigned on 31 January 2021. \*\*\* on 11 February 2022, Merrill Lynch International (BofA Securities) was appointed as a corporate broker and financial adviser to the Company. Annual Report and Accounts 2021108 RTW Venture Fund Limited