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@AICpress reveals record results in its investment company H1 2021 review

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.

 

MonthInvestment companyAIC sectorNew management
JanAlternative Liquidity FundHedge FundsRampart Capital
FebKeystone Positive Change (previously Keystone)UK All CompaniesBaillie Gifford
AprBrown Advisory US Smaller Companies (previously Jupiter US Smaller Companies)North American Smaller CompaniesBrown Advisory

Source: AIC.

 

Fees:

Removed performance fees

MonthInvestment companyAIC sector
FebMartin Currie Global PortfolioGlobal
FebKeystone Positive ChangeUK All Companies
MarNB Distressed DebtDebts – Loans & Bonds
AprUtilico Emerging MarketsGlobal Emerging Markets

Source: AIC.

 

Introduced tiered fees

MonthInvestment companyAIC sector
JanHeraldGlobal Smaller Companies
FebKeystone Positive ChangeUK All Companies
FebMartin Currie Global PortfolioGlobal
AprEcofin Global Utilities & InfrastructureInfrastructure Securities
AprUtilico Emerging MarketsGlobal Emerging Markets
AprFidelity China Special SituationsChina / Greater China

Source: AIC.

IPOs

MonthInvestment companyAIC sectorTotal assets (£m)
FebCordiant Digital InfrastructureInfrastructure370
FebVH Global Sustainable Energy OpportunitiesRenewable Energy Infrastructure243
MarDigital 9 InfrastructureInfrastructure300
MayTaylor Maritime InvestmentsLeasing179
JunAquila Energy EfficiencyRenewable Energy Infrastructure100

Source: AIC/Morningstar.

Fundraising by existing investment companies:

Top fundraising sectors

AIC sectorSecondary fundraising total (£m)
Renewable Energy Infrastructure883
Growth Capital803
Infrastructure475
Global Smaller Companies436
Flexible Investment327

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 sectorSecondary fundraising total (£m)
Schiehallion503
Smithson307
Chrysalis Investments300
Renewables Infrastructure Group240
Tritax Eurobox198

Source: AIC/Morningstar. Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.

 

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