The Schroder British Opportunities Trust is to push forward with its £250m fundraise despite rivals in the UK equity investment company space struggling to get their vehicles off the ground.
In a stock exchange update, published today (November 10), the trust said it was opening the placing programme with the intention of floating on the London Stock Exchange on December 1.
The trust plans to invest in companies hit by Covid-19, as Schroders anticipates an “increased need" by UK companies for fresh equity.
It said: “[We] believe there is a once in a generation opportunity to invest equity capital into high quality, high growth UK companies in the £50m to £2bn equity value range with sustainable business models at attractive valuations.”
The trust will aim to invest 50 per cent in public equity investments, with the other 50 per cent going into unquoted stocks.
Schroders pushing ahead with its fundraise comes against a backdrop of British smaller companies trusts failing to launch.
In October, Sanford Deland cancelled plans to float a UK Buffettology Smaller Companies trust after failing to attract the required level of funding just weeks after Tellworth British Recovery and Growth did not raise the £100m it needed for its IPO and scrapped the launch.
Run by two of Schroders’ senior managers, Rory Batemen and Tim Creed, the Schroder British Opportunities Trust will aim to provide a net asset value return of 10 per cent a year.
It also pledged that environmental, social and governance company engagement would be a "critical feature" of the investment strategy, with a focus on companies with business models which are considered to be sustainable in terms of both the longevity and durability of their businesses and their ESG behaviours.
Chairman of the trust, Neil England, said: "Recent events have created investment opportunities in a number of quality companies with high growth potential and additionally we believe that many UK businesses are currently mispriced.
“Several of these companies have already been identified as candidates for early investment.
“The excellent track record of both the public and private equity investment teams at Schroders gives us confidence that we can deliver compelling returns for investors."
Mr Bateman, co-manager of the trust and head of equities at Schroders said the trust was a “compelling opportunity” for investors given the combination of public and private equity and the intense focus on ESG engagement.
imogen.tew@ft.com
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