The Investment Company (INV) has reported on its last set of annual results as a UK smaller companies investment trust run by Chelverton Asset Management. In the year to 30 June net asset value fell 7.2% to 73.9p per share with some of the decline reflecting the costs of its corporate restructuring, having appointed Dowgate Wealth to run the £10.5m company as a wealth preservation, multi-asset fund since 28 July. NAV per share had increased by 5.4% since the year-end to 77.8p at 31 August. Chair Ian Dighe said the Board was “pleased with the progress to date and looks forward to working with Dowgate over the coming years”.

Richard Williams, senior analyst at QuotedData, said: “These results draw a line under the old Investment Company. The more important development is the radical overhaul completed since the year end, with Dowgate taking over and rebuilding the portfolio around its scarcity theme, spanning global equities, gold, bitcoin and inflation-linked securities. Early performance has been encouraging, with NAV up 3.2% between Dowgate’s appointment and the end of August, while the discount has all but disappeared. It is far too early to judge the new strategy on performance, but INV now has a much more distinctive proposition. The challenge will be proving it can deliver and attract sufficient investor support to overcome its still small scale.”

Aurora UK Alpha (ARR), the £267m value fund run by Gary Channon at Phoenix Asset Management, underperformed the FTSE All-Share in the first half of the year. Half-year results show net asset value declined 6.3% to 275.3p per share with the shares down 7% against the benchmark’s 7.2% rise. The company said the outbreak of the war in Iran in the first quarter had driven up oil prices and pushed up interest rate expectations leading to a sell-off in some of its domestic stocks, most notably its 15.2% position in housebuilder Barratt Redrow. Other detractors were Nintendo, Castelnau Group and Ryanair, while Lloyds bank and Frasers were positive for performance.

Richard Williams said: “Another difficult period for Aurora, with its 6.3% NAV decline contrasting sharply with the FTSE All-Share’s 7.2% gain and extending a run of underperformance that has now lasted two years. The concentrated portfolio magnified the impact of falling share prices, particularly at Barratt Redrow, but the manager has responded by leaning further into the stocks it believes are most undervalued rather than retreating from them. Barratt is the clearest example, with Aurora adding materially to its holding during the sell-off. It was pleasing to see the manager’s subsequent push for greater capital returns result in the housebuilder committing to £400m of buybacks, but whether moves such as this can finally close the sizeable gap the manager sees between portfolio prices and underlying values remains to be seen.”

NewRiver REIT (NRR) has formed a joint venture with Singapore-based real estate investors Soilbuild and United Engineers to invest in retail parks. NRR has made a £9.3m net equity investment for a 25% interest in the capital partnership which has bought The Springs retail park in Leeds for £73.5m from Legal & General.

Richard Williams said: “Capital partnerships, or joint ventures, have been a good way for heavily discounted REITs to grow and NRR has proved it here. The Springs looks a good fit with its portfolio, offering a 7% initial yield, high occupancy and scope for further rental growth. The new partnership gives NRR a scalable way to increase its exposure to retail parks without committing large amounts of its own capital, while generating recurring management fees alongside returns on its 25% stake. That could become an increasingly important source of growth if the partnership expands as intended. The transaction does push pro-forma LTV to 44%, however, but planned disposals should bring gearing back towards its 40% guidance.”