Specialist life science and biotech picks have driven strong performance at RIT Capital (RCP ), but it still can’t shake its stubborn discount.

In the most recent update for the £4.3bn portfolio, it reported a 2.5% uplift in net asset value (NAV) throughout October. Following the payment of a 21.5p interim dividend, RCP’s year-to-date NAV total share price return is now 12.8%.

However, the discount remains persistently wide at 25% − a reminder of the concerns around valuations of private holdings that blighted the trust and wider private equity space.

The trust enjoyed a strong performance across all three of its distinct pillars; quoted equities, private investments, and uncorrelated assets.

Gains were led by quoted equities, which make up 45% of the trust, with key drivers of performance coming from ‘direct technology holdings’.

The financial services platform has been sideswiped by worries around online broking as US regulators threaten new rules and more competitors enter the market.

Maggie Fanari, manager of RCP, said specialist fund managers have also proved their worth as biotech and life sciences enjoyed a bounce back.

Biotech and life sciences investments boomed during the Covid pandemic but have struggled to gain traction in recent years. US policy around pharmaceutical regulation and drug pricing and a freeze on funding all combined to drag the sector lower.

However, a turnaround is afoot, marked by a significant leap in biotech deals in the third quarter. A report by GlobalData confirmed financing deals worth $3.1bn occurred in the period, up from $1.8bn in the same period last year.

In an interview with Citywire for the Big 12 series, Fanari said there were ‘really strong green shoots in biotech’, which the latest NAV update is testament to.

Fanari said October’s gains defied the US government shutdown, which delayed economic releases, and ‘investor sentiment remained upbeat’ despite the political uncertainty.

‘US equities were again driven by the technology sector and enthusiasm for artificial intelligence (AI) related stocks following positive earnings updates,’ she added.

Private investments, which are almost a third of NAV, enjoyed a strong month off the back of ‘robust third quarter valuations for some of our largest fund investments exposed to fintech, AI and enterprise software’.

Uncorrelated strategies, which Fanari said act as ‘a steady diversifier of returns’, also added to NAV, particularly gold and credit strategies.

 ‘Commodities broadly rose, led by gold which continued its rally,’ she said.

‘Against this backdrop, our diversified portfolio delivered positive returns across all three investment pillars, benefitting from exposure to our highest conviction themes including the acceleration of technological adoption across sectors, and a global reshaping of supply chains and investment flows as the world becomes increasingly multi-polar.’