Scottish Mortgage (SMT) has issued its first shares in nearly five years as the £15.6bn Baillie Gifford flagship looks to regain its 2021 peak and finally recover from the painful 2022 and 2023 crash. With its shares trading at a 4% premium to net asset value, compared to an average 8% discount below NAV in the past year, the global equity investment trust issued 1.8m shares on Friday at a price of £14.48, just 80p short of its November 2021 peak of £15.28. The shares had been held in treasury following a sustained period of buybacks after the trust de-rated following the slump in its shares to a 621p low in May 2023. The shares have rallied 68% in the past year, buoyed in part by the increasing valuation of SpaceX, the Elon Musk rocket, satellite and artificial intelligence group that accounts for 19.3% of the portfolio and plans a $1.75-$2tn flotation in June.
Fair Oaks Income (FAIR), the £184m, 18%-yielding debt fund, made a 5.5% underlying investment return in 2025 for ordinary shareholders who saw that translated into a 3% total return as the price of their investment closed the year on a 5.7% discount to net asset value. Realisation shareholders, who are invested in Fair Oak’s winding-down Master II fund, saw a 9.3% gain in NAV although their shares sank to an 8.2% loss as their discount widened to 17.5%. The company moved to a permanent “evergreen” structure last year with four-yearly exit opportunities and recently announced plans to cut its dividend as part of a move to reporting in euros rather than dollars. On the outlook for this year, the company said its high-quality and resilient portfolio of high-yield corporate loans known as collateralised loan obligations (CLOs) was well positioned as low financing rates continued to create “compelling opportunities” and the underlying companies performed in line with expectations.
Castelnau (CGL), the £303m special situations fund run by Gary Channon at Phoenix Asset Management Partners generated an underlying total return of 14% last year that underperformed the FTSE All-Share’s 24% and was accompanied by an actual total shareholder of just 0.3% as the discount to net asset value widened from 4.45 to 15.9%. While Dignity, the undertakers that is the portfolio’s largest holding, made a 22% return, model train maker Hornby fell 11% in a year that saw it delist after 40 years on the stock market. A 0.5% holding in Rawnet, the digital agency, was written off and Silverwood, a premium brands investor, was halved in value to a 0.2% position as Castelnau moved from business turnarounds to owning cash-generative investments. Aurora UK Alpha (ARR), which Channon also manages, invests in Castelnau.
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