BlackRock Smaller Companies (BRSC) chair Ronald Gould says the investment trust is looking forward to delivering “better shareholder value”, improved returns and lower costs after last month’s merger with BlackRock Throgmorton lifted its assets by £303m to £886m. However, annual results to the 28 February showed the portfolio underperformed with an 11.2% underlying investment return that was nearly half the 21.5% of the Deutsche Numis Smaller Companies index. Fund manager Roland Arnold, who is now joined by Throgmorton’s Dan Whitestone, said the underperformance had narrowed in the second half of the year with its investments returning 8.1% versus the benchmark’s 10.6%. In the first half to 31 August the total return on net assets of 2.9% had lagged the index’s 9.9% return. However, he remained frustrated at the poor share price performances of holdings such as payments provider Boku, Tatton Asset Management and XPS Pensions despite analyst upgrades and progress in their businesses.
Matthew Read, senior analyst at QuotedData, said: “It’s been a busy year for BlackRock Smaller Companies Trust, with the combination with BlackRock Throgmorton providing a larger asset base, improved liquidity, a broader shareholder register, a strengthened management team and lower expected ongoing charges. The introduction of a refreshed dividend policy, revised investment flexibility and a formal performance-related tender mechanism are also positive developments that should put the trust on a better footing going forward.
“However, the marked underperformance versus the benchmark is not the outcome shareholders would have hoped for, although it is not entirely surprising given the difficult backdrop for UK smaller companies, where persistent outflows, macro uncertainty, geopolitical disruption and narrow market leadership – particularly around AI winners and losers – have continued to weigh on sentiment and valuations. The enlarged BRSC is now better positioned structurally, but delivery on performance will be key if the board’s ambition of a sustained single-digit discount is to be achieved.”
Finsbury Growth & Income (FGT) rallied 6.1% in April helped by a market rebound in response to the ceasefire in the US-led war on Iran and EQT’s private equity bid approach for testing specialist Intertek. In his monthly commentary fund manager Nick Train was pleased UBS analysts had recently removed London Stock Exchange Group (LSEG) from its list of “AI losers”. Train highlighted how LSEG, his top 12.8% holding, had rallied more than 30% since its lows in February when data and software stocks slumped in response to the perceived threat from artificial intelligence companies launching low-cost rivals to their businesses. “LSEG’s shares are still 21% below their peaks of 2025. The bulls think they will get back to those levels. We see those highs as just a temporary staging post to a fundamentally bigger and more valuable business, that could be rewarded by a share price several times higher than today’s.” Train remains under pressure for the trust’s poor performance, however. At the end of April shares in the UK equity income trust had fallen 4.8% year to date against a 5.2% rise in the FTSE All-Share. Over five years, including dividends, shareholders have suffered a 6.2% loss compared to the 66.9% total return from the UK benchmark. Over the whole of his tenure this century, however, shareholders would have done much better than the All-Share. Since his appointment in December 2000, Train has delivered a total shareholder return of 656.7%, beating the index’s 350.8%, according to figures from the company. In January, the company passed its first continuation vote with 97% of shareholder votes in favour.
Geiger Counter (GCL), the £90m uranium fund, says Manulife mining fund managers Diana Racanelli and Craig Bethune will take on the portfolio from today, 18 May. The investment company’s board said it continued to consider long-term options. This follows the resignation in March of the long-standing CQS portfolio managers Keith Watson and Robert Crayfourd, who are joining Tufton Investment Management. The board responded by serving protective notice against CQS Manulife.
CT Healthcare (CTHT), the former BB Healthcare that replaced Bellevue Asset Management with Columbia Threadneedle in March, has announced its first quarterly 15% tender offer. The price at which shares will be sold will be announced on 3 June.
Molten Ventures (GROW), the £1bn venture capital firm enjoying a strong rebound in its high-tech portfolio, has sold another £63m from its holding in neobank Revolut, leaving it with a £110m stake after having taken total profits of around £120m in the unquoted company. A full-year trading update last month showed Revolut was one of four key contributors to an 11% gross portfolio return in the year to 31 March. The latest sale brings total realisations to £300m in the past two years. GROW said it had made a 20 times return since first investing £7m in Revolut in 2028 three years after the fintech was founded with follow-on investments in 2020, 2021 and 2024 before it started to sell down last year. GROW shares have rallied 89% in the past year but have fallen 21% over five years. Annual results will be published on 9 June.
Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.
