Investment Companies Monthly Roundup

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The pandemic recovery continued in September with certain countries catching up on their vaccination programmes, such as Japan, which after a few rough months made gains and took two of the top spots for the best performing sectors. Meanwhile, the UK Equity & Bond Income sector, which only has two members, soared on the back of the news that Acorn Income is to undergo a ‘scheme of reconstruction’ which involves winding up, with assets rolling into the open-ended Unicorn UK Income fund. Meanwhile, Infrastructure Securities took the top spot from Premier Miton Global Renewables performing well likely from rising energy prices, with gains amplified by being around 40% geared by its split capital structure. Insurance and Reinsurance Strategies also benefited from CatCo Reinsurance’s plans to hand back money to ordinary shareholders and C shareholders. China’s rebound lost momentum in September and was the worst performing sector following lacklustre sales, a weaker stock market and worsening business confidence. As the state takes greater control of key sectors, questions are being raised over the country’s regulatory environment. European Smaller Companies and UK All Companies also fell as both regions are suffering from rising energy costs and the impact of Brexit (see Appendix 1 for a breakdown of how all the sectors have performed this year).

September’s median total share price return was -0.9% (the average was 1%) which compares with a median of 2.5% in August. Readers interested in the most recent briefings from the industry can click here to access our economic and political roundup.

Best performing sectors over September

Worst performing sectors over September

On the positive side

September saw a whole range of trusts from different sectors performing well, which points to more focused individual events rather than the usual broader market events impacting performance. Geiger Counter was the best performing trust in both NAV and share price terms in September. The Uranium mining sector continues to shoot the lights out and the trust’s small-cap focus also helped. Strong gas prices benefitted JPMorgan Russian. As mentioned earlier, Premier Miton Global Renewables’ NAV performed well from being heavily invested in renewables during the current energy crisis and from being heavily geared. Growth Capital and Private Equity funds including Schiehallion, Standard Life Private Equity, Schroder UK Public Private and Literacy Capital also performed well in both NAV and share price terms. The private equity industry has substantial liquidity to deploy which has led to high levels of investment and takeover activity.

On the negative side

Commodities & Natural Resources trusts including BlackRock World Mining and Golden Prospect Precious Metals were among the worst performers once again in September, likely on fears of slowing Chinese demand, and were joined by BlackRock Latin American and Aberdeen Latin American Income, whose markets are heavily reliant on basic materials such as commodities and natural resources. European and UK funds also featured heavily in the worst performing trusts in NAV terms, as the regions have suffered from the impact of Brexit. In share price terms, Civitas Social Housing was the worst performer after being targeted by ShadowFall, a short seller, who made a variety of accusations (after it shorted the stock) which the company intends to address.


Discounts and premiums

More expensive and cheaper relative to NAV

As highlighted earlier, Acorn Income performed well following the announcement of its ‘scheme of reconstruction’ which will see shareholders’ money either returned or rolled into the open-ended Unicorn UK Income fund (which is managed by Simon Moon and Fraser Mackerise, who currently manage the trust’s smaller companies portfolio) and the trust officially wind up. The news helped narrow its double-digit discount to just 3.6% in September. Meanwhile, Literacy Capital saw its premium shoot up last month in anticipation of a higher NAV as one of its holdings, Hometree, completed a funding round with a new lead investor to raise further equity to support the continued growth of the business. Seraphim Space completed its purchase of Spire Global, one of the leading pioneers of the nanosatellite market while Schiehallion published strong interim results.

On the other hand, Syncona became cheaper in September. Investors may have become disillusioned as its NAV slides on weak prices for its listed portfolio. Civitas Social Housing came under attack from ShadowFall, as already mentioned, but also suffered as it fell out of the 250 Index. Aberdeen Standard European Logistics and Tritax Big Box both launched fundraising issues at discounts to prevailing market prices but premiums to NAV.

Money in and out

Money coming in and going out

After a quiet August, fundraising soared again in September, with £2.8bn of net new money raised, with much of it going into Property and Renewable Energy Infrastructure trusts. Home REIT raised £350m in a hugely oversubscribed issue, far exceeding its original target of £262m. The money will be used to provide accommodation for homeless people in the UK. Tritax EuroBox decided to increase the size of its placing to £213m after demand flew past its £170m target. Target Healthcare REIT also raised £125m, having initially targeted £100m. It will invest in more care homes.

Meanwhile SDCL Energy Efficiency Income also enjoyed an oversubscribed issue, raising £250m against a target of £175m, while Renewables Infrastructure raised gross proceeds of £200m to repay debt it had run up, in part as it made its first investments in Spain, buying four solar plants.

Share buybacks were led by VietNam Holding (by way of a tender offer for 30% of the company), Alliance Trust, Witan, AVI Global and Allianz Technology.

Recently published research notes

Strategic Equity Capital – Headed in the right direction

At the end of September 2020, Ken Wotton became the lead manager of Strategic Equity Capital (SEC) and, during the ten months since, SEC has provided NAV and share price returns that are significantly ahead of the MSCI UK Smaller Companies and even the broader MSCI UK Index. Despite this, and a comprehensive plan to reduce the discount, which now includes potential tender offers in both 2022 and 2024 (subject to certain triggers), the discount to net asset value has reduced but is still material.

We do not think that this will persist and, with the decision to shift the focus of SEC’s portfolio towards smaller companies now bearing fruit, combined with a UK market that is becoming increasingly investable for overseas institutions and attracting the interests of private equity buyers, now could prove to be a very good entry point.

Standard Life Private Equity Trust – Proving its mettle


We held the view throughout 2020 that private equity funds like Standard Life Private Equity (SLPE) were being unfairly penalised by the market with wide discounts to net asset value (NAV). This was especially true once it became clearer, from the middle of 2020 onwards, that distributions were likely to be good, and relatively few underlying companies required liquidity support.

Since November, European-listed private equity has been outperforming broader global listed equities. However, until recently, this had limited impact on the discounts of funds such as SLPE, whose discount is broadly in line with the wider peer group average of 12.8%. We think this discount narrowing was justified and should continue. Over 40% of SLPE’s underlying exposure is to healthcare and technology, where rampant exit activity has been fuelling much-better-than-expected distributions. SLPE expects a busy rest of 2021, with the pipeline looking particularly good in primary investments in new funds and co-investments.

Aberdeen Standard European Logistics Income – Handbrake off in growth drive

Aberdeen Standard European Logistics Income’s (ASLI’s) manager has taken a prudent approach to growing the fund thus far, taking a little-and-often capital raise strategy to improve the quality of the portfolio. However, it now proposes a £75m placing to acquire assets from an identified investment pipeline worth €165m and take advantage of the structural tailwinds behind the logistics sector.

ASLI is poised to capture significant rental growth in the short and medium term. The European logistics market is characterised by growing demand for space – driven by a continued boom in online retailing – and historic low levels of supply of logistics property. The fund’s market-leading environmental, social and governance (ESG) credentials, with further initiatives to come, emphasise the quality nature of the portfolio and ensures that it is fit for the future.

BlackRock Throgmorton Trust – Confidence rewarded

In mid-December 2020, when we last published a note on BlackRock Throgmorton Trust (THRG), its manager Dan Whitestone said he was genuinely excited about the prospects for the stocks in its portfolio. That enthusiasm has been vindicated and the many investors that have embraced the trust over the past year have been well-rewarded.

Dan highlights the breadth of opportunity afforded by the stocks in THRG’s portfolio. His confidence in the outlook for these companies is undimmed and, reflecting this, THRG’s net market exposure is at the high end of its range.

Major news stories over September

Portfolio developments

Corporate news

Managers and fees

Property news

QuotedData views


Here is a selection of what is coming up. Please refer to the Events section of our website for updates between now and when they are scheduled:


Have you been listening to our weekly news round-up shows? Every Friday at 11 am we run through the more interesting bits of the week’s news and we usually have a special guest or two answering questions about a particular investment company.

Friday The news show Special Guest Topic
4 Jun ARR, BHGG, BHGU, BHME, BHMG, BHMU, LTI, SCIN, WWH Ben Ritchie Dunedin Income Growth
11 Jun CORD, DGI9, PHI Stephanie Sirota RTW Ventures
18 Jun AUGM, LTI, MTE Stephen Inglis Regional REIT
25 June AEMC, CRS, BOOK Michael O’Brien Fundsmith Emerging Equities
2 July GSS, PCFT, SHED, BSIF David Conlon GCP Asset Backed Income
9 July AGT, DIGS Matthias Siller Baring Emerging EMEA Opportunities
16 July AGT, ABD, SONG, PRSR, RHM Nick Wood Quilter Cheviot
23 July RNEW, PSH Gareth Powell Polar Capital Global Healthcare
6 August AEMC, ANW, CREI, DRIP Matthew Howard BMO Commercial Property
13 August AIF, SSON Andrew Bell Witan
20 August APAX, ELTA, PSH Abbie Glennie Aberdeen Smaller Companies Income
27 August GRP, SHB David Smith Henderson High Income
3 September AIF, BRET Ian Lance Temple Bar
10 September GSEO, ASLI, SLI Craig Baker Alliance Trust
17 September APAX, GABI, SUPP Robin Parbrook Schroder Asia Total Return
24 September NCYF, RNEW, FEML, USF Peter Hewitt BMO Managed Portfolio

Coming up

1 October AIE, CAT, IGC, VNH Tim Creed Schroder UK Public Private
8 October OCI Steven Tredget Oakley Capital
15 October AEMC/ANW Nicholas Yeo Aberdeen China
22 October SMT Claire Shaw Scottish Mortgage
29 October BOOK Richard Pindar Literacy Capital
5 November SBO Rory Bateman Schroder British Opportunities


Our Independent Guide to quoted investment companies is an invaluable tool for anyone who wants to brush up on their knowledge of the investment companies’ sector.

Appendix – September median performance by sector

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