Brothers Make Billions From Ex-Wall Street Banker's Pharma Firm

(Bloomberg) -- Germano and Giammaria Giuliani’s family made a fortune with remedies for hair loss, indigestion and sensitive skin. The family business is still making money after more than a century in operation, but what’s really driving the brothers’ wealth is a bet on another health-care company.The Giulianis hold stakes worth about $3 billion in Royalty Pharma Plc, a New York-based firm that buys pharmaceutical royalties from academic institutions, research hospitals and drugmakers such as Pfizer Inc. Its shares have surged 70% since an initial public offering last year. The Giulianis first invested in Royalty Pharma after Germano and his father met founder Pablo Legorreta in an airport in Milan in 1996, the same year the former Wall Street banker set up the company. They parlayed proceeds from their closely held family business -- Giuliani Spa -- into an early fundraising round for Royalty Pharma and added more ahead of its IPO. Their investment has returned at least 250% in the past five years.“It’s basically like you have a pharmaceutical company without the burdens of a pharmaceutical company,” Germano, 48, said in an interview about Royalty Pharma, which now has a market value of about $29 billion. “We’re very proud of it -- to go from zero to get to such a size.” Digestion Aid A representative for Royalty Pharma, which reported fourth-quarter and full-year results Wednesday, declined to comment. Germano and Giammaria, who live in Monaco and Switzerland, respectively, and are unrelated to former New York City Mayor Rudy Giuliani, are worth about $4.5 billion combined, according to the Bloomberg Billionaires Index.Legorreta, 57, founded Royalty Pharma after working as an investment banker in Paris and New York for Lazard Freres, where he helped put together mergers and acquisitions.About a century earlier, Germano and Giammaria’s great-grandfather invented a herb-based remedy -- Amaro Giuliani -- to aid digestion. It became successful enough to allow succeeding generations to expand into researching and developing prescription drugs.The brothers, who also hold a stake in Zug, Switzerland-based HBM Healthcare Investments AG worth more than $400 million, have increasingly diversified their fortune into technology, finance and real estate. Investment firms for the brothers have bought stakes in Alphabet Inc., JPMorgan Chase & Co. and a unit of Fireside Investments, which was set up by former Goldman Sachs Group Inc. banker Jonathan Langer.“We are strategic,” Giammaria, 42, said on their investments. “We are long term.” Multifamily Office The Giulianis are owners of multifamily office Gisev, named after the brothers and fellow founder Achille Severgnini. Family offices have proliferated in recent years among the ultra-wealthy, with some of the largest including Bill Gates’s Cascade Investment and Sergey Brin’s Bayshore Global Management. The average family office has $917 million of assets under management, according to research published in 2019 by Campden Wealth and UBS Group AG. Like the Giulianis, many of Gisev’s 40 or so clients trace their origins to northern Italy, the industrialized region that typically drives the country’s economy. The Giulianis invest with other clients of the Lugano, Switzerland-based firm for some deals, favoring the greater scale and reduced costs as compared with going it alone. “We have an alignment of interest,” said Severgnini, 49, whose family have been private wealth advisers for more than a century. “We’re trying to pursue the same goal.” Read more: How New Wealth, Few Rules Fuel Family Office Boom: QuickTakeEven with Royalty Pharma’s shares rising 59% on their trading debut last year, the Giulianis couldn’t avoid the impact of the coronavirus pandemic. The brothers were forced to shore up some of their investments following the outbreak of Covid-19 and paused new acquisitions, though they’ve since begun deploying capital again.Many of the world’s rich -- including Virgin founder Richard Branson and German industrialist Heinz Hermann Thiele -- have sold stakes in their biggest listed assets for liquidity or to diversify during the crisis. But the Giulianis said they have no such plans when it comes to Royalty Pharma.“We are very happy to own it and have no intention to sell,” Germano said. “We don’t need the funds.” (Updates with Royalty Pharma reporting results in fifth paragraph) ©2021 Bloomberg L.P.

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