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The AIC reveals record results in its investment company H1 2021 review

New York City, USA - October 30, 2017: Wall Street stock exchange charging metal bull in NYC Manhattan lower financial district downtown NYSE, extreme macro closeup of face

 

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.

 

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