Half-year results from Baillie Gifford growth capital fund Schiehallion and Franklin Global; annual figures from Alternative Income REIT; shareholder approval for the merger of European Assets with European Smaller Companies Trust; plus updates from Sirius Real Estate, Marwyn Value Investors, Calculus VCT and Canadian General Investments.
Schiehallion (MNTN), the £1.1bn Baillie Gifford growth capital fund that has not been marketed to private investors in its six-year history, is seeking shareholder approval to move from the specialist fund segment of the London Stock Exchange to its closed-ended investment funds category, as well as complete the Guernsey investment company’s migration to UK tax status and become an investment trust in the first quarter of next year. A circular calling a general meeting will be sent to shareholders this month. In half-year results, the dollar-based fund said it made an underlying 9.9% investment return in the six months to 31 July with net asset value (NAV) per share rising to $146.95 cents from $133.69 cents at 31 January. The shares generated an 11.1% total return in the period as their discount, or gap, to NAV narrowed from 19.2% to 18.3%. The gain was largely driven by its three largest holdings, Italian digital consumer product company Bending Spoons (12.5%), SpaceX (9.9%) and TikTok app owner ByteDance (7.8%), “all of which continue to showcase remarkable operational execution within their respective domains – true champions, if you will,” said fund managers Peter Singlehurst and Robert Natzler. Schiehallion shares have rallied 45.6% over the past year but over five years have lost 12.6%, the best performance in the Growth Capital sector where the average loss has been 26.4%.
Franklin Global Trust (FRGT) reported a “disappointing” 4.1% investment loss and 5.9% drop in shareholder returns in the six months to 31 July compared to the 1.3% return from its benchmark, the MSCI All Country World index. The £189m global equity investment trust was weighed down by US tariff uncertainty hurting its holdings in consumer spending stocks and its overweight position in healthcare stocks, where it suffered from the fall in Novo Nordisk as the Danish obesity drugs maker executed poorly on its strategy. Exposure to semiconductor companies, including Nvidia, offset some of this negative impact. Chair Christopher Metcalfe said the board “continues to liaise with large shareholders and monitor performance extremely closely”. The trust currently lies ninth out of 11 trusts in its sector with a 15.7% five-year total shareholder return that underperforms the group average of 40%. Jonathan Curtis, chief investment officer of Franklin Equity Group joined Zehrid Osmani as co-manager in July.
Alternative Income REIT (AIRE), the £58m long-lease UK commercial property fund that cut its dividend target by 10% last month after a debt refinancing, says forecast falls in interest rates should benefit the property market. Together with its asset management activities the board is confident the portfolio will continue to deliver an attractive yield, currently 8.6% with the shares priced 14% below net asset value (NAV). In annual results for the year to 30 June, the company said its properties “continued to perform relatively well” rising 3.4% to £67.3m with NAV per share of 83.64p up from 80.9p a year earlier year. Earnings per share calculated by the EPRA standard were 6.57p and provided 108.4% cover to dividends of 6.2p per share, up 5.1% from 5.90p.
Sirius Real Estate (SRE), the Anglo-German business park investor that has bought €300m of properties this year, says it is focusing on “intense asset management” in the UK where it added 18% more space with the acquisition of Hartlebury Trading Estate in Worcestershire, but will announce more investments in Germany this quarter. Its new self-storage property director Tom Lampard “is injecting significant impetus into our existing storage offering, as well as identifying interesting new-build opportunities on our extensive bank of under-utilised land.” Meanwhile, the “strategic appointment” of Major General (Retd) Angus Fay CB has generated “strong leads” in the expanding defence sector. In the half-year trading update, the company said it achieved a 15.2% year-on-year increase in rent roll, an advance of 5.2% on a like-for-like basis. It said it remains on track to deliver full-year results in line with expectations “buoyed by improved economic confidence leading to increased demand for our space”.
Marwyn Value Investors (MVI) has teamed up again with Avril Palmer-Baunack, the former chief executive of British Car Auctions, who has become chair of MAC Alpha (MACA), a company set up by the specialist smaller companies fund to exploit further consolidation in the automotive sector. Palmer-Baunack partnered with Marwyn to buy BCA Marketplace in 2015, going on to complete a number of bolt-on acquisitions that saw the company promoted to the FTSE 250 index before being bought by TDR Capital for £1.9bn in 2019. James Corsellis, chief investment officer of Marwyn Investment Management, said: “We are delighted to be working with Avril again, and look forward to further developing acquisition opportunities together.” MAC Alpha is one of eight investments held by MVI, a £75m Cayman Islands investment company on a 47% discount.
European Assets Trust (EAT) received shareholder approval on Friday for its liquidation and merger with European Smaller Companies Trust (ESCT). Trading in its shares will be suspended on Thursday. ESCT shareholders also backed the combination of the two funds.
Calculus VCT (CLC) has issued a prospectus for the £10m it is seeking to raise in the 2026 and 2027 tax years. The share offer has an over-allotment facility allowing the £44m venture capital trust to raise a further £10m.
Canadian General Investments (CGI) reports net asset value per share (NAV) was $80.47 at 30 September leaving it with an underlying investment gain of 17.4% this year and of 25% over 12 months. These trailed the 23.9% and 28.6% respective total returns of its benchmark, the S&P/TSX Composite index.
