Investors are targeting technology assets

Investors are targeting technology assets

The burgeoning tech sector and allocating to funds governed by ESG principles are becoming trends for UK investors, according to a report. 

A survey of 2,000 investors by IW Capital found almost a quarter (24 per cent) were looking to support tech-based businesses, such as fintech and biotech, in the next two years.

This, if representative of the UK investor population, would amount to 4.5m people.

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Almost half (46 per cent) of the respondents to the 2019 Citizen Investor report said they were likely to invest in a business that makes a positive social or environmental impact. They were polled over the past month.

Luke Davis, CEO of IW Capital, said so many investors wanting to invest in fintech and biotech showed the desire to support innovation, which was encouraging for the UK’s burgeoning tech community. 

"Coupling this with an ever-increasing conscientiousness around the environment and climate change paints a picture of a future facing and forward-thinking SME arena and community of investors," said Mr Davis.

Minesh Patel, director at EA Financial Solutions, said his firm had been investing in Axa Framlington’s biotech fund for some time, using it as a satellite to clients’ core portfolios.

He said: "There has always been interest in tech, but perhaps a lack of awareness that people could invest in it.

"We don’t spend hours discussing it with clients, but ensure they know how it fits within their overall portfolio to target their desired outcome."

However, he said he would steer clients away from a UK-only portfolio as a globally focused range of investments provided better diversification of risk. 

Mr Patel also said there had been interest in ESG investing for some time, with many of his clients having an allocation to these funds in their portfolio.

He said: "People’s awareness should be raised about ESG and ethical investment as it is an exciting area.

"And taking the approach does not come at the expense of performance, which has been stellar."

Laith Khalaf, senior analyst at Hargreaves Lansdown, said ESG investing was definitely moving up the agenda with consumers, fund groups and the corporate sector.

He said: "As yet, the proportion of assets invested in ethical funds is still relatively small and hasn’t really broken into the mainstream in the same way as passive investing has for example.

"Having said that even more traditional funds are now taking account of ESG factors as part of their investment process.

"As ever part of the problem is defining what ethical investing is and delivering a simple solution to investors, because it means different things to different people."