FUNDRAISING HITS RECORD AND ASSETS REACH ALL-TIME HIGH
– 17 investment companies change fees to benefit shareholders
A total of £6.3bn was raised by investment companies in the first half of 2021, the highest amount ever in a half-year period according to new data from the Association of Investment Companies (AIC).
The record amount included £5.1bn raised by existing investment companies (secondary fundraising), also a record for a half-year period1, and £1.2bn raised in IPOs, the highest amount since H1 2017.
The £6.3bn total fundraising exceeded the previous record of £4.9bn in H1 2017.
Of the £5.1bn raised by existing investment companies, the Renewable Energy Infrastructure sector raised the most (£883m) followed by Growth Capital (£803m) and Infrastructure (£475m). The largest fundraisings by existing investment companies were completed by Schiehallion (£503m) in the Growth Capital sector, Smithson (£307m) in the Global Smaller Companies sector and Chrysalis Investments (£300m) in the Growth Capital Sector.
Investment company industry assets hit an all-time high of £249bn at the end of April, reflecting the continuation of a strong recovery.2
Boards continued to negotiate fee changes to benefit shareholders in the first half of the year with 17 investment companies making amendments such as lowering management fees, introducing tiered fees and abolishing performance fees.3
Five investment companies launched in the first half of the year raising £1.2bn. This is the highest amount raised by IPOs since the first half of 2017 when ten companies launched raising £1.5bn and a marked increase on the pandemic-stricken H1 2020 when one company launched raising £103m.
Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “The record fundraising in the first half of this year shows investment companies bouncing back strongly from COVID-19 and giving investors what they want, from growth opportunities in smaller and unquoted companies to income-generating alternatives such as renewable energy assets and infrastructure. IPO activity also increased significantly in the first half of this year. The new launches demonstrate that income remains a top priority and investment companies are continuing to help investors gain access to emerging areas such as digital infrastructure and energy efficiency.
“Fee reductions have been a strong theme of recent years in our industry and this has continued in 2021 with 17 investment companies making fee amendments to benefit shareholders. Independent boards are a key advantage of investment companies over other types of fund and it’s encouraging to see them flexing their muscles on shareholders’ behalf.”
Mergers and asset manager changes
In addition to the mergers between Invesco Income Growth and Invesco Select UK Equity, and City Merchants High Yield and Invesco Enhanced Income, the following investment companies changed asset manager.
| Month | Investment company | AIC sector | New management |
| Jan | Alternative Liquidity Fund | Hedge Funds | Rampart Capital |
| Feb | Keystone Positive Change (previously Keystone) | UK All Companies | Baillie Gifford |
| Apr | Brown Advisory US Smaller Companies (previously Jupiter US Smaller Companies) | North American Smaller Companies | Brown Advisory |
Source: AIC.
Fees:
Removed performance fees
| Month | Investment company | AIC sector |
| Feb | Martin Currie Global Portfolio | Global |
| Feb | Keystone Positive Change | UK All Companies |
| Mar | NB Distressed Debt | Debts – Loans & Bonds |
| Apr | Utilico Emerging Markets | Global Emerging Markets |
Source: AIC.
Introduced tiered fees
| Month | Investment company | AIC sector |
| Jan | Herald | Global Smaller Companies |
| Feb | Keystone Positive Change | UK All Companies |
| Feb | Martin Currie Global Portfolio | Global |
| Apr | Ecofin Global Utilities & Infrastructure | Infrastructure Securities |
| Apr | Utilico Emerging Markets | Global Emerging Markets |
| Apr | Fidelity China Special Situations | China / Greater China |
Source: AIC.
IPOs
| Month | Investment company | AIC sector | Total assets (£m) |
| Feb | Cordiant Digital Infrastructure | Infrastructure | 370 |
| Feb | VH Global Sustainable Energy Opportunities | Renewable Energy Infrastructure | 243 |
| Mar | Digital 9 Infrastructure | Infrastructure | 300 |
| May | Taylor Maritime Investments | Leasing | 179 |
| Jun | Aquila Energy Efficiency | Renewable Energy Infrastructure | 100 |
Source: AIC/Morningstar.
Fundraising by existing investment companies:
Top fundraising sectors
| AIC sector | Secondary fundraising total (£m) |
| Renewable Energy Infrastructure | 883 |
| Growth Capital | 803 |
| Infrastructure | 475 |
| Global Smaller Companies | 436 |
| Flexible Investment | 327 |
Source: AIC/Morningstar. Secondary fundraising = fundraising by existing companies (excludes IPOs). Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.
Top fundraising by existing individual investment companies
| AIC sector | Secondary fundraising total (£m) |
| Schiehallion | 503 |
| Smithson | 307 |
| Chrysalis Investments | 300 |
| Renewables Infrastructure Group | 240 |
| Tritax Eurobox | 198 |
Source: AIC/Morningstar. Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.
