Schroder British Opportunities announces intention to float and raise up to £250m – Schroder British Opportunities Trust this morning announced its intention to launch an IPO and to admit its shares on the premium segment of the official list of the financial conduct authority and to trading on the main market of the London Stock Exchange. The company is seeking to raise up to £250m. You can access the prospectus by clicking here.
Investment proposition includes approximately 50:50 split between public and private equity investments
The announcement this morning included the following key points on the investment proposition:
- “COVID-19 and other macro factors are having a dramatic effect on many UK companies and the company anticipates an increased need by UK companies for fresh equity and believes that a proactive public and private equity investment strategy can provide access to positive returns through participation in capital raising opportunities;
- The company believes that there is a once in a generation opportunity to invest equity capital into high quality, high growth UK companies in the c. £50m to £2bn equity value range with sustainable business models at attractive valuations. We believe that this will be a platform for driving long term value;
- The company will aim to achieve a target allocation of approximately 50% public equity investments and approximately 50% private equity investments. It is anticipated that in the period immediately following initial admission, the company’s portfolio will predominantly comprise public equity investments until target deployment into private equity investments is achieved;
- The company aims to provide a NAV total return of 10% per annum (once the company is fully deployed across the target allocation between public and private equity investments) over the life of the company; and
- The company believes that this is a highly-differentiated investment strategy, where the company will aim to identify compelling investments in both public and private equity, thereby providing a broader UK investment opportunity set than provided by a solely public market investment.”
It is also noted that ESG company engagement will be a critical feature of the company’s investment strategy. The company’s focus will be on companies with business models which are considered to be sustainable in terms of both the longevity and durability of their businesses and their environmental, social and governance behaviours.
Rory Bateman and Tim Creed to manage the fund
It is noted that the company’s portfolio will be managed by two of Schroders’ most senior investment professionals; Rory Bateman, Head of Equities and Tim Creed, head of UK & European private equity.
Rory notes that “the current macro environment presents investors with a staggering opportunity with regard to UK public equity valuations. The company’s strategy offers a highly differentiated growth based approach, hand in hand with the support of sustainable development screening metrics that we believe will result in a portfolio that has very limited overlap with any existing London listed investment trust.
Once the company reaches its target deployment, we are aiming to deliver double-digit annual returns over the life of the company by taking advantage of what we believe is a once in a generation opportunity. We believe Schroder British Opportunities is a compelling opportunity for investors given the combination of public and private equity, the intense focus on ESG engagement and the circa seven-year fund life.”