ii ACE 40 Syncona investment trust under formal review

The trust is in the specialist category of our ACE 40 list of rated ethical investments.

interactive investor, the UK’s second-largest DIY investment platform, has placed Syncona (LSE:SYNC), an ii ACE 40 rated investment trust, under formal review due to concerns regarding the trust’s performance and premium volatility.

The investment trust aims to achieve superior long-term capital appreciation from investing in life science companies and falls into ii’s ‘Embraces’ category of its ACE 40 ethical rated list (incorporating Avoids, Considers, Embraces categories).

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “This trust is managed by a highly capable and experienced management team and aims to achieve superior long-term capital appreciation from investing in life science companies with a target annualised return of 15% over the long term.

“It is genuinely unique among investment managers, with a nine-to-12-month period of due diligence before founding a company, starting with the science followed by a strategic investment plan and investment strategy. The trust builds and funds companies to turn exceptional science into transformational treatments to patients in areas of high unmet need, working in close partnership with academic founders and management teams.

“But in keeping with our stated methodology, we can’t ignore the fact that the trust has been very volatile in both share price and premium terms, and posted negative returns year to date, which has also damaged its three-year track record.

“As a result of the pandemic, two of the trusts listed holdings’ (Freeline (NASDAQ:FRLN)and Autolus (NASDAQ:AUTL)) drug trials have been pushed back, which has contributed to the portfolio underperformance.”

There has been a recent change of a key management member for the trust. In June 2021, it was announced that John Bradshaw CFO is retiring at the end of July 2021 with Rolf Soderstrom joining as CFO, bringing 30 years' experience from senior roles in finance from the 19 July 2021.

“Syncona have also expanded the management team further with Markus John joining as chief medical officer and head of R&D from 1 July, bringing 20 years of pharma leadership experience to help expand and build the portfolio as well as Fiona Langton-Smith joining as chief human resources officer.

“We will be conducting a formal review to assess whether the trust continues to be appropriate for our investors and be included in the ii ACE 40 best ideas list.”