The trust is the only one of three proposed UK trust launches to gain enough investor interest to IPO.
Schroders (LSE:SDR) will bring its British Opportunities Trust to market as planned, despite the trust falling well short of its fundraising target. It raised £75 million for the launch, having initially targeted £250 million in a difficult environment for IPOs. It will IPO tomorrow (1 December) and the ticker will be SBO.
Two other planned UK investment trust launches recently failed to get out of the starting blocks due to lack of investor demand. The launches of Tellworth British Recovery & Growth and Sanford Deland’s UK Buffettology Smaller Companies Trust were both shelved last month as investors failed to offer enough support.
British Opportunities aims to take advantage of a “once-in-a-generation opportunity to invest equity capital into high-quality, high-growth UK companies in the £50 million to £2 billion equity value range with sustainable business models at attractive valuations”.
It will be managed by head of equities Rory Bateman and head of UK and European private equity Tim Creed using a public and private equity investment strategy. The managers say they will offer much-needed funding to British businesses, whether to boost their growth potential or get them back on course.
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Trust chair Neil England thanked the institutional, private wealth and retail investors who have supported the launch, and hailed its “successful IPO”.
“Today we have a fantastic opportunity to invest in the future of British businesses, both public and private, while supporting UK employment through the pandemic and beyond,” adds Bateman.
“We will start to invest the IPO proceeds in short order and as we deliver on our investment strategy we look forward to growing the fund further in the near future.”
Co-manager Creed says:
“We believe there is an increased need for fresh equity investment into UK companies and through SBO we now have the structure to take advantage of this considerable opportunity.”
He adds: “Our investment strategy focuses on high-quality growth companies that have benefited from Covid-19 and require funding to maximise their growth potential and those that have been impacted and require equity to return to their previous growth trajectories. We have a number of compelling investment opportunities in our pipeline and will utilise Schroders’ rigorous approach to ESG (environmental, social and governance) integration in our investment decisions.”
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