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QuotedData’s Investment Companies Quarterly Review – Second Quarter 2021


Investment Companies Quarterly Roundup

Kindly sponsored by Baillie Gifford and Aberdeen Standard Investments

Finally on the mend

Global equity markets finally appear to be recovering after almost 18 months of extreme volatility and uncertainty. On average, even the losses on those funds in negative territory this quarter were muted by comparison with last year. UK assets are improving and many emerging market economies are proving more resilient against the pandemic than expected.

Discounts were fairly stable over the quarter, having recovered from last-year’s COVID-related jitters.

Increasing enthusiasm for European property has helped narrow discounts in the sector over the past year. During Q2, some trusts benefited even further from specific events such as the end of Berlin’s rent freeze, which boosted Phoenix Spree Deutschland’s share price.

In this issue

Performance data – Commodity funds ended the quarter wiping out almost all the gains made during the start of the year while growth stocks seem to be back in vogue after temporary concerns over inflation and rising interest rates. Investors fled India in April as it was hit by a second COVID-19 wave, though the country bounced back swiftly.

Major news stories – New leasing fund Taylor Maritime completed deployment of its IPO proceeds while Schroder UK Public Private made its first new investment since changing manager. Gresham House Strategic announced a strategic review, Lindsell Train updated its benchmark and performance fee, and Pacific Horizon‘s Ewan Markson-moved onto pastures new. In property news, St Modwen Properties was the subject of a £1.2bn cash offer.

Money in and out – The sector raised £1.8bn of net new capital over the second quarter of 2021, with notable fundraisings from Cordiant Digital Infrastructure and Digital 9 Infrastructure and new listings by Aquila Energy Efficiency and Literacy Capital.

Research published over Q2 2021

Over the quarter, we published notes on Jupiter Emerging & Frontier Income, India Capital Growth, Tritax EuroBox, JPMorgan Japanese, Ecofin US Renewables Infrastructure, Civitas Social Housing, Temple Bar, Bluefield Solar Income Fund, (plus a flash note), CQS New City High Yield Fund, CQS Natural Resources Growth and Income, Montanaro UK Smaller Companies and Standard Life Investments Property Income.

Winners and losers

Out of a total of 331 investment companies (we excluded funds with market caps below £15m), the median total NAV return over the second quarter of 2021 was 3.8% (the median total share price return was 6.2%).

By sector

UK assets continued to benefit from the vaccine rollout over Q2 along with what is promised to be a permanent full reopening of the economy. There has been a greater onus on supporting smaller businesses through the pandemic which may be reflected in the share price return of the UK smaller companies sector. The top performing sector however was Country specialist, largely thanks to strong performance from Vietnamese funds, which appeared to shrug off concerns over rising COVID-19 cases.

Japanese funds suffered as the country has fallen behind on its vaccine rollout programme, despite the incentive to get the virus under control as it prepares to finally host the Olympic Games. But Property – rest of world funds (a number of which are fairly low-quality) led declines, though these were minimal at a median share price loss of just 1.7%. By comparison, last quarter, the worst performing sector (Japanese Smaller Companies) was down 10.9%. On the whole, equity markets performed well having dropped so far over the past year.

By fund

As the sector performance section highlighted, country specialist funds led the way in NAV terms during Q2, with Vietnam mandates VietNam Holding, Vietnam Enterprise and VinaCapital Vietnam Opportunity, at the top of the charts. Domestic investors drove that market higher, encouraged by good earnings data for the first quarter of 2021. Despite the volatility in April, foreign direct investment swiftly returned to India in May and India Capital Growth did particularly well from the shift in sentiment towards small and mid-cap companies. More growth-focused funds such as Scottish Mortgage and BlackRock Throgmorton benefited from renewed worries about new virus variants which led investors back towards companies that could grow regardless of the strength of the economy.

In share price terms, Electra Private Equity continued to climb after a strong showing in April as the company approaches the final stage of its winding up. Meanwhile, Riverstone Energy made an impressive comeback despite annual results, released in February, that depicted a particularly tumultuous 2020 with poor returns. Chrysalis Investments has been busy raising further funds for its ‘active pipeline of £1bn’, and making the most of a ‘buoyant tech IPO market’ – having most recently invested £75m into leading retirement tech platform Smart Pension. A couple of commercial property funds also feature on the list. These were perhaps oversold and are rising in anticipation of an end to lockdowns.

Gresham House Strategic was the worst performing trust in NAV terms during Q2 by a long stretch, as the only one making double digit losses. The company has had a challenging few months after announcing a strategic review in May and calls for its chairman to retire, which was followed by the dramatic resignation of one of its managers, Richard Stavely. Aberdeen New Thai continued to lag its benchmark after revealing lacklustre results in April, while BH Macro’s NAV return has fallen ahead of its merger with BH Global (which also saw its NAV fall during Q2 by 0.4%).

In addition to being one of the ten worst performing funds in NAV terms during the second quarter of 2021, debt fund Secured Income was the worst performing in share price terms, having fallen by 20% in June after taking a knife to the valuations of its film financing portfolio. Cuban property fund, Ceiba slid as protests rocked the country. Meanwhile Augmentum Fintech’s share price fell after it announced a significant fundraise in June, and Symphony International‘s restaurant and hotel investments continue to struggle in the face of the pandemic. Major shareholder AVI (managers of AVI Global) has vocalised its frustration with the company.

Significant rating changes by fund

Getting more expensive

Discounts narrowed across much of the private equity sector in Q1 and this continued into Q2, as we continued to drive the message that we thought these funds were too cheap.  Electra Private Equity and Oakley Capital led the narrowing in discounts. Property funds in the UK commercial and residential sectors also saw their discounts narrow. These included BMO Commercial Property, Schroder Real Estate, PRS REIT and Residential Secure Income, all of which have benefited from the economic re-opening.

Getting cheaper

Syncona’s premium narrowed at the start of Q2 as sentiment moved against it following the announcement that one of its holdings, Gyroscope Therapeutics, was putting its planned IPO on hold. It is notable that RTW Venture, which has a similar approach also features on this side of the table. It was a tough quarter for the renewable energy infrastructure sector, with market declines led by JLEN Environmental Assets Group after it issued more shares, Bluefield Solar Income following its NAV fall and Octopus Renewables Infrastructure.

Money raised and returned

The 331 investment companies we follow raised £1.8bn of net new capital over the second quarter of 2021. There were three IPOs, starting with ship leasing trust Taylor Maritime Investments, which raised $254m in May. In June, renewable energy infrastructure mandate, Aquila Energy Efficiency raised £95m and Literacy Capital listed. It didn’t raise any fresh capital at launch but currently has a market cap of about £116m

Money coming in

The biggest fundraising came from Cordiant Digital Infrastructure and Digital 9 Infrastructure, both of which only launched in Q1, but brought in a combined £420m during Q2 – making £1bn in total raised for these trusts this year. Both companies have substantial pipelines of new assets and we could easily see them come back again for more money later in the year. Polar Capital Global Financials capped a remarkable turnaround in its fortunes since last year’s cash exit opportunity with a sizeable issue of C shares. Investors are backing banks once again and the sector is outperforming.

Money going out

Share buybacks were led by Fair Oaks Income, as holders of 13.4% of the fund elected to go into a realisation pool rather than rollover into an ongoing fund, River and Mercantile UK Micro Cap, which has a policy of handing back cash once its net assets exceed £100m, Scottish Mortgage and Witan.

Major news stories over Q2 2021

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
16 July AGT, ABD, SONG, PRSR, RHM Nick Wood Quilter Cheviot
9 July AGT, DIGS Matthias Siller Baring Emerging EMEA Opportunities
2 July GSS, PCFT, SHED, BSIF David Conlon GCP Asset Backed Income
25 June AEMC, CRS, BOOK Michael O’Brien Fundsmith Emerging Equities
18 Jun AUGM, LTI, MTE Stephen Inglis Regional REIT
11 Jun CORD, DGI9, PHI Stephanie Sirota RTW Ventures
4 Jun ARR, BHGG, BHGU, BHME, BHMG, BHMU, LTI, SCIN, WWH Ben Ritchie Dunedin Income Growth
28 May GHE, SEC Matthew Potter Honeycomb
21 May AIF, CORD, SBO Georgina Brittan JPMorgan Smaller Companies
14 May NPSN, RMDL Stuart Widdowson Odyssean
7 May JLG, JLIF, SIGB, SMP Helen Steers Pantheon International
30 April AGT, DIG, HOME, GWIini Nick Montgomery Schroder Real Estate
23 April AEWU, AIF, GSF, MNTN James Harries Securities Trust of Scotland
16 April BLND, PSDL, SBO Hugo Ure Troy Income & Growth
9 April Review of March, CBA, SEC, SEIT, SUPP Neil Hermon Henderson Smaller Companies
26 March MATE, CHRY, DGI9, SYNC Ross Teverson Jupiter Emerging and Frontier Income
19 March CSH, APX, SUPR Richard Moffitt Urban Logistics REIT
12 March HOME, LXI, BBOX Stuart Young Phoenix Spree Deutschland
5 March Review of February, CMHY, SEC, GSF, APAX Nick Brind Polar Capital Global Financials
26 February LWDB, TIGT, BRFI, RDI Nalaka De Silva Aberdeen Diversified Inc. & Growth
19 February JLEN, KKV, BH Global, EBOX/BOXE Matthew Tillett The Brunner Investment Trust
12 February RTW, UKW, SEC, GVP Alan Gauld Standard Life Private Equity Trust
5 February RHM, IPOs Dean Orrico Middlefield Canadian Income
29 January SLPE, FSFL, RSE Philip Kent GCP Infrastructure
22 January SONG, JGC, RMMC Adam Khanbhai Strategic Equity Capital
15 January GVP, SUPP, SBO James Robson RM Secured Lending
8 January Review of 2020 Andrew McHattie Review of 2020


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 – Q2 2021 median performance by sector

This note was prepared by Marten & Co (which is authorised and regulated by the Financial Conduct Authority).

This note is for information purposes only and is not intended to encourage the reader to deal in any of the securities mentioned within it.

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Second Quarter 2021 Investment Companies Review

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