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New fundraising record for investment companies already reached in 2021

Fundraising by existing companies this year tops 2019 record, and money raised in IPOs is at three-year high

Fundraising by existing investment companies (known as secondary fundraising) has bounced back strongly this year, with £8.71 billion raised so far.

This already exceeds the previous record for secondary fundraising, which was set in 2019 with £7.35 billion raised over the whole calendar year.

Fundraising by existing companies has been led by the Renewable Energy Infrastructure sector, which raised £1.69 billion. This was followed by Infrastructure (raising £988 million), Growth Capital (£803 million) and Property – Europe (£556 million).

The largest individual secondary fundraising was by Schiehallion (£503 million), followed by Digital 9 Infrastructure, which raised £300 million in its IPO in March then went on to raise a further £450 million.

There were nine IPOs up to 4 October raising £2.08 billion, which already exceeds the funds raised by IPOs in both 2019 and 2020.

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “Healthy fundraising by investment companies this year is a sign that they have bounced back from the pandemic and are continuing to meet investors’ needs.

“It’s particularly encouraging to see such significant fundraising for long-term assets in areas such as renewable energy infrastructure and ambitious growth companies. Directing capital into these areas is critical to rebuilding the economy as the recovery from the pandemic gathers pace. There is clearly strong investor demand and the closed-ended structure of investment companies continues to provide investors with a proven means of gaining exposure to less liquid assets.”

Top sectors for secondary fundraising (fundraising by existing investment companies)

AIC sector Amount raised by existing investment companies (£m)
Renewable Energy Infrastructure 1,688
Infrastructure 988
Growth Capital 803
Property – Europe 556
Global Smaller Companies 555
Flexible Investment 513
Property – UK Commercial 424
Property – UK Logistics 408
Property – UK Residential 405
Royalties 306

Source: AIC/Morningstar (as of 04/10/21).

Investment companies raising highest amounts through secondary fundraising

Investment company AIC sector Amount raised through secondary fundraising (£m)
Schiehallion Growth Capital 503
Digital 9 Infrastructure Infrastructure 450
Renewables Infrastructure Group Renewable Energy Infrastructure 440
Smithson Global Smaller Companies 424
Tritax Eurobox Property – Europe 412
SDCL Energy Efficiency Income Renewable Energy Infrastructure 410
Home REIT Property – UK Residential 350
Chrysalis Investments Growth Capital 300
Tritax Big Box REIT Property – UK Logistics 300
Hipgnosis Songs Royalties 241

Source: AIC/Morningstar (as of 04/10/21). 

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