Our monthly roundup of news and views from the investment companies sector should be hitting your inboxes shortly. The macro roundup contains a long and detailed but fascinating look at the technology sector from Ben Rogoff, manager of Polar Capital Technology. He was writing in the trust’s annual report, which was published on 20 July.
The sector has made you decent money in recent years and COVID-19 seemed to turbo-charge this. Many managers, Ben included, highlight the way in which the response to the pandemic accelerated the pace of change within a wide spread of industries.
One of these is financial services, where payments companies, investment platforms and the like have been revolutionising the sector. Augmentum Fintech has been a big beneficiary of this and was able to issue £55m of stock in July in an oversubscribed issue. It appears to be trading on a 26% premium, yet as Andrew McHattie suggested in this week’s show, this might just be a reflection of an out of date NAV.
Nevertheless, this seems at odds with the 7% plus discounts that Polar Capital Technology and Allianz Technology are trading on.
We also saw the launch of HydrogenOne Capital Growth last month. The amount raised was perhaps disappointing but it indicates that there is demand for stocks exploiting the technological breakthroughs behind the forecast surge in production of green hydrogen. Again, Ben says he also has some exposure to this area.
Access to healthcare
The incredible advances in the world of healthcare that we have seen in recent years are another focus. Ben notes the phenomenal advances in the understanding of proteins that have been enabled by artificial intelligence. This may open up new fields of medicine. There is plenty to get to grips with already as gene editing offers the hope of cures for a wide range of previously untreatable diseases. One fund exploiting this is RTW Venture. We were pleased this week to see this company make the move from the specialist fund segment – where it is often hard for retail investors to get a look in – to a premium listing on the London Stock Exchange. RTW is currently trading on a 6% premium.
If there is a theme here, it is that investors are, rightly in our view, excited about the prospects for technological advances across a wide spread of sectors. However, they rate the three funds that specialise in these areas – Polar, Allianz and Herald – on discounts. The logic doesn’t stack up to me.