Schroder BSC Social Impact is considering its future after becoming frustrated with an inability to expand. The trust was launched in 2020 but a wide discount has prevented it from issuing more shares.

The board says all strategic options to enhance value for the company’s shareholders are being considered, which could include a managed wind down.

The board wants to know whether some investors want to retain exposure to the mandate and/or, directly or indirectly, to the existing portfolio. However, if it has to hand back cash, it also wants shareholders’ views on the best method for that to happen.

The statement highlights that the existing portfolio is quite illiquid, with around 60% of the NAV invested in funds that will not mature for five years or more (the longest of these is nine years). It may be possible to sell these in the secondary market but that usually means accepting a knockdown price. The board wants shareholders’ views on that too.

In the meantime, the board has asked the manager to stop making new investments.

[QD comment, James Carthew: As a social impact fund, the societal benefits of the investments should be at least as important to investors as the returns that they earn. With assets in excess of £80m, I don’t feel as though the fund is too small. However, returns are quite meagre and perhaps for some investors that has outweighed the good that the trust has done. I feel that the real failure here has been to find new investors to replace those who got frustrated and sold up. A policy of offering investors the chance to switch into a redemption pool every five years or so alongside efforts to attract new capital might still make sense.]

SBSI : Schroder BSC Social Impact is considering its future