Annual results from UIL and Brown Advisory US Smaller Companies, dire interims from British & American, better half-year progress at Marwyn Value Investors and Baker Steel Resources, a fee cut at BlackRock Greater Europe and more beneficial M&A at RTW Biotech and International Biotechnology.
UIL (UTL), a £286m split capital investment trust run by Utilico Emerging Markets (UEM) manager Charles Jillings, has proposed an annual £4m share buyback programme before it delists in 2028 after the repayment of its zero dividend preference shares. The proposal came in annual results showing improved performance in the year to 30 June with an underlying 14.7% investment return compared to last year’s 15.3% loss. This underpinned a 22.5% total shareholder return following the previous 24.8% decline.
James Carthew, head of investment company research at QuotedData, said: “UIL’s plan to provide £4m to buy back shares at a 20% discount might be welcome given the prevailing discount of 38.5%, but looks ungenerous, nevertheless. In my view, as the plan to delist the company in 2028 progresses, minority investors who do not want to come along for the ride ought to be getting an exit much closer to net asset value.”
British & American (BAF) has seen its market value shrink to £4m after an 82% crash in net asset value mainly due to the halving in February in its largest US investment, Geron Corporation, after flat sales in the Christmas quarter for the biotech company. NAV per share tumbled from 28p to 5p in the first half but has partly recovered to 7p since 30 June.
International Biotechnology Trust (IBT) and RTW Biotech Opportunities (RTW) have both reported uplifts from the latest bid in the US drugs sector. Genmab has agreed to buy fellow Nasdaq stock Merus for $8bn cash at $97 per share, a 41% premium to the cancer specialist’s closing share price on 26 September. Merus represented 0.3% of IBT and adds 0.1% to net asset value while RTW had a 1.2% weighting and will see NAV rise 0.5%. IBT said it was its seventh M&A deal for a portfolio holding this year, and its 32nd since 2020. RTW said it was the third take-out from its portfolio in 2025 including the recent acquisitions of Verona and Alcyone. Rod Wong, chief investment officer of RTW Investments, RTW’s fund manager, said: “Separately, the readacross from Pfizer’s acquisition of Metsera (not a portfolio company) is particularly encouraging for our obesity assets, Corxel and Kailera, which represent a meaningful portion of NAV.”
QuotedData’s James Carthew said: “The biotech and healthcare market is deeply out of favour with investors but the larger players within it seem undaunted. Cash-rich companies have a need to refresh new drug pipelines and medical advances are opening up attractive new markets.”
The £558m BlackRock Greater Europe (BRGE) has negotiated a cut in its annual management fees to BlackRock starting this month. The current tiered charge of 0.85% on net assets up to £350m and 0.75% above that will be reduced to 0.65% up to £400m, 0.6% above that to £1bn, and 0.525% over £1bn. This will result in a blended annual management fee rate of 0.634% based on average net assets for the year to 31 August of £593.3m. As a result, the ongoing charge ratio will fall to 0.775% from 0.95%.
Baker Steel Resources (BSRT) reported a first half 16.4% investment return with shareholders seeing a total return of 11.1% for the six months to 30 June on account of the discount that currently sees shares in the £72m mining fund stuck 37% below net asset value (NAV). Both beat the MSCI World Metals and Mining index which rose 3.6%.
Brown Advisory US Smaller Companies (BASC) underperformed in the year to 30 June with a 3.7% investment loss compared to the 0.7% decline in sterling of the Russell 2000 index. Shareholders’ loss in the £150m investment trust was less at 1%, reflecting a slight narrowing in the discount which currently sees the shares trade 10% below net asset value. During the period the company promised a 100% tender offer if it does not beat its benchmark in the five years to 2028. The next continuation vote is in November 2026.
Marwyn Value Investors (MVI), the specialist £72m UK smaller companies trust, had a strong first half with a 13.4% total investment return underpinning a 29.7% total shareholder return that beat the 7.6% gain in the FTSE Small Cap index and 8.2% from the FTSE AIM All Share benchmark. The shares stand on a 49% discount and yield 7%.
