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Schroders scraps £75 million for British Opportunities Trust

written by Bella Palmer

The company has said it had scraped £75m for its British Opportunities Trust (SBO), which aims to take stakes in both public and private firms

Schroders has said it had scraped together £75m for its British Opportunities Trust (SBO), which aims to take stakes in firms from the more mature end of the smaller companies universe in both public and private markets.

The company, led by head of equities Rory Bateman and head of UK and European private equity Tim Creed, reiterated its belief that "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".

Chair Neil England said the raise had been "successful" and brought on board a range of investors, from institutional, private wealth and retail clients.

Bateman added: 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.

But the total falls well short of the £250m the asset manager initially targeted, and follows on from the failed launches of Tellworth British Recovery & Growth and Sanford DeLand's UK Buffetology Smaller Companies Trust.

Numis analyst Priyesh Parmar reasoned that while "it is a good result to get an IPO away", it only just reached its minimum size.

The fund is small and will need to grow to put itself under the radar of a wider investor base, he said.

While some analysts had suggested the investment management trio were looking to tap investors' "patriotic spirit", the reality of a deep underweight to UK assets put paid to that.

Emma Wall, head of investment research at Hargreaves Lansdown, said that investors failed to get behind the three launches speaks to that pessimism on UK equities.

Investor sentiment towards the UK remains muted despite the excellent value opportunities there are in the market, Wall said. The headwinds of Brexit and coronavirus have meant that many investors - professional and retail alike - consider the UK too risky a bet at the moment.


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