Just four months after saying it would soldier on, Chelverton Growth (CGW ) has announced the wind-down of its minnow portfolio of mostly unlisted stocks.

On Wednesday, the tiny £2.99m investment company, run by David Horner and David Taylor, put forward a proposal for voluntary liquidation to return cash to shareholders.

In July, the pair, who won the mandate to run the 155-year-old investment company, said they were up to the challenge of growing the fund despite it shrinking 83% as investors jumped at the chance to tender their shares at close to net asset value (NAV) rather than the 6% discount they had been trading at.

However, the board has now said the current size of the fund, which is equivalent to 53p per share, is sub-scale and renders the trust uneconomic. 

They said it was in shareholders’ best interests to wind up the company, and they will distribute cash to shareholders in an ‘orderly’ fashion. 

The board had for some time been trying to boost returns to shareholders but said the process was ‘drawn out due to major economic events including Brexit, Covid and the Russian invasion of Ukraine’.

‘These events have served to create market uncertainty and turmoil that only in recent months has the board felt able to move forward with its plans within a more stable economic environment,’ it said.

The tumult in markets has been reflected in less-than-steady returns from the trust, with the NAV declining 21.5% in 2022, while the shares almost halved. But in 2021, the NAV soared 59% and the shares rocketed 85%.

The fund is invested in AIM-listed companies up to £50m market cap that are at a ‘point of change’, as well as unquoted companies where there is a ‘likelihood of the shares becoming listed or traded on AIM, or the investee company being sold’.

At present, 92% of the portfolio is invested in Ceps, which stands for Chelverton Equity Partners and is an AIM-listed holding company that provides funding to small, unquoted companies. These include household fabrics business Friedmans, trophy and medal specialist Aford Awards, and leotard manufacturer Milano.

A further 5.7% of the portfolio is in La Salle Education, and the remainder of the fund is in Petards, the AIM-listed developer of advanced security and surveillance systems.

The investment group also manages the £28m Chelverton UK Dividend (SDV ), which reported a 15.3% fall in NAV in the year to the end of April versus a 5.2% fall in the MSCI Small Cap index. It blamed political turmoil, a banking crisis and war for the poor performance.