Tim Creed, head of private equities at Schroders, told FTAdviser that although the UK Public Private trust — formerly known as Woodford Patient Capital — also invested in unquoted assets, the portfolio was based on venture capital while the new trust had eyes for private equity.
Mr Creed already runs the UK Public Private trust and will run the British Opportunities Trust when it lists.
He said the new British Opportunities trust would “sit very nicely alongside” the UK Public Private trust, but that the funds would be “fishing in very different ponds”.
Mr Creed added: “We are really pleased with the development of the [UK Public Private trust] so far.
“The portfolio is really improving with companies heading in the direction we want.”
The Schroder British Opportunities trust is currently in its initial round of fundraising — which closes next week (November 26) — and is looking to attract at least £250m.
Rory Bateman, head of equities at Schroders, said: “This is a once in a generation opportunity to get into UK equities on the public and private side.
“There are super attractive valuations as a result of the pandemic, and we are offering a unique proposition of looking for growth companies with fresh equity, in public and private investments, and from an ESG perspective — those three things are something you don’t see all together in other products.”
The trust will aim to invest 50 per cent in public equity investments, with the other 50 per cent going into unquoted stocks.
Run by Mr Bateman and Mr Creed, the British Opportunities Trust will aim to provide a net asset value return of 10 per cent a year.
The managers will look to invest in “high growth” and “mispriced growth” — those companies positively impacted by the coronavirus crisis and those negatively affected respectively — with good valuations and a back story of success.
Mr Bateman said: “What is really exciting is that we have fresh capital. A lot of funds out there will have legacy holdings, so they won’t be able to capitalise on the opportunities as much and you can’t just switch out of a business and recirculate that cash.”
The manager went on to say that advisers would need to “think outside the box” with the trust and see it as a solution across the private and public spectrum.
He added: “We will be looking for the best ideas irrespective of public or private, to get the better opportunities and therefore the better upsides.
“We want to democratise private assets. Most investors don’t get access to them, but we want to make this available to every retail investor.”
Schroders pushing ahead with its fundraise comes as several British smaller companies trusts, such as Tellworth and Sanford Deland, failed to launch due to lack of demand.
Mr Creed said Schroders had managed to push forward with its fundraise as it had “contacts up and down the country” and had been able to access “every corner of the UK” to pitch the new trust.
He added: “Going through the IPO roadshow was super different, with a lot of Zoom calls, but it did mean we could reach everyone without getting on planes and trains.”
With a high level of interest in the new investment vehicle, Mr Creed said Schroders hoped it could build the trust to be a significant size.
However, he said they would be “careful to raise the amount of capital that could be invested well”, and then scale up afterwards.
imogen.tew@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
