Trust round-up: RTW Biotech, OCI, Picton, Schroder Euro Real Estate, Gore Street

RTW Biotech Opportunities (RTW )

Performance

The £490m trust reported a 6% decline in net asset value (NAV) total returns in the six months to end of June but still beat the 11.4% fall in the Russell 2000 Biotech index. Although it lagged the 1.9% drop in the Nasdaq Biotechnology index.

The largest detractor was Rocket Pharmaceuticals, which saw its shares plunge more than 80% after a serious problem with its trial for a treatment for Danon disease, a rare genetic heart disorder. The shares have, however, rallied 30% since the end of June.

Private holding Artios saw its valuation fall 3% on higher than expected drug development costs, while publicly listed Dyne Therapeutics suffered due to a poor reaction to clinical data.

Positive movements were seen at Akero on the back of a successful clinical trial and rumours of a sale, while UroGen receive US Food and Drug Administration (FDA) approval for its bladder cancer drug.

Portfolio changes

Manager Roderick Wong bought five new positions, including specialist enzyme, protein and flavour developer American Laboratories and Prollum Bioscience, which focuses on autoimmune diseases.

Portfolio simplification

RTW invests in both listed and unlisted companies, with the listed holdings further split into core public and other public. Core positions were those invested in as private companies and continuing to be held after IPO.

However, manager RTW Investments, said investors had said splitting the pools of stocks obscures the fact the trust is mostly invested in public companies, and going forward the fund will report listed holdings under one category.

Outlook

Wong said the first half of the year was the most volatile since the company’s launch in 2019. However, he said new FDA leadership and the launch of government biotech initiatives ‘has turned increasingly supportive for innovation’.

‘We see these changes as a tailwind that could meaningfully accelerate the path from scientific breakthrough to patient benefit,’ he said.

Oakley Capital Investments (OCI )

Performance

The £1.3bn listed private equity fund confirmed a 7.1% rise in its NAV in the first six months of 2025, driven by the sale of legal technology platform vLex at a more than 300% uplift to the December valuation, adding 4% to the value of the portfolio.

The valuation of nursery chain Bright Stars, semiconductor analysis company TechInsights, testing and inspection company Phenna Group, and North Sails, a portfolio of marine brands, were also revised higher.

These increases offset the weakness at Time Out, once the portfolio’s flagship investment; its shares slumped 62% in the first half.

New investments

OCI manager Stephen Tredget invested £54m over the period, and £6m was returned from a refinancing of estate agent Dexters. He invested in German underground infrastructure group Infravadis and Italian financial services consultancy JBMC.

A total of £32m follow-on investments were made, including £18m into UK cyber services provider Bridewell, which is merging with the I-Tracing, which is held in an Oakley sub-fund.

Outlook

Tredget said the fund could continue to perform strongly ‘despite the impact of persistent macroeconomic uncertainty and a more selective dealmaking environment’.

‘While the outlook for global markets remains cautious, Europe has shown relative resilience, with private equity activity in the region set to continue to grow year on year and founder-led businesses continuing to attract investor attention,’ he said.

Picton Property Income (PCTN )

Share buyback

The £543m commercial property trust announced a further buyback programme of up to £12.5m, extending its previously announced programme in January.

Since then, it has bought back 23.8m shares at a cost of £17.9m, representing 4.4% of opening share capital. The buyback had originally been for £10m before being increased to £12.5m in April and then £17.5m in May.

Reasoning

The board said the current share price – which trades at a 23% discount to NAV – ‘significantly undervalues’ the trust and repurchasing the shares at this price is a ‘means of creating value for shareholders’.

‘The decision to undertake further purchases follows the company unconditionally exchanging contracts for the disposal of an office asset which is due to complete later this month,’ said the board, which is chaired by Francis Salway, who took over at the start of the year.

What the analysts say

Stifel analyst John Cahill said the ongoing buyback programme has ‘supplemented the strong operational performance of Picton and adept capital recycling’.

Schroder European Real Estate (SERE )

Performance

The second quarter delivered a flat NAV at the £136m European commercial real estate trust, as it put aside cash to cover a potential tax liability.

It reported a NAV of 119.8 euro cents per share, broadly unchanged over the three months to June from 120 euro cents.

Manager Jeff O’Dwyer said the portfolio values remained ‘resilient’ with ‘robust industrial portfolio valuations, and an uplift in Berlin’ which offset declines in other sectors.

Dividends

When dividends of 1.48 euro cents were included, the NAV total return totalled 1%. Dividend cover fell to 0.9 times to 1.3 times in the quarter after the sale of the Frankfurt DIY assets in the previous quarter.

Portfolio update

A number of asset management initiatives were completed, including the signing of a 12-year lease extension on Berlin DIY assets to Hornbach, which is the second largest tenant in the portfolio by income. SERE also signed a new lease on the Saint-Cloud office in Paris at a rent in line with market levels.

Tax liability

The trust is in talks with the French tax authority over a demand for a payment of €14.2m, including interest and penalties. The group intends to appeal against the amount but said it has ringfenced the amount demanded from cash reserves.

After taking professional advice, the trusts said it is ‘ultimately more likely than not to prevail’ in fighting the demand for the tax payment.

Gore Street Energy Storage (GSF )

Performance

The £513m battery investor, which has been embroiled in a spat with rebel investor RM Funds, reported an unchanged NAV over the second quarter at 102.8p per share. When dividends of 1p per share were taken into account, the total return was 0.94%. NAV total returns since launch in 2018 are now 49%.

Cash generation topped £3.7m, and is now expected to ‘materially increase’ as both its California-based Big Rock and UK-based Enderby projects are operational and as more assets are ‘onboarded onto the proprietary GSET platform, which continues to outperform the market’.

GSET is an artificial intelligence-driven trading platform developed by fund manager Gore Street Capital, which has replaced third-party providers on much of the GB portfolio and will now be rolled out further.

Board changes

RM Funds lost its requisition vote to replace GSF chair Pat Cox and board member Caroline Banszky but the trust did concede to making some changes to the board. Simon Merriweather will join the board as a non-executive director from this month.

What the board says

Cox said the second quarter demonstrated ‘the benefits of the portfolio’s geographic diversification’ and the board would continue to update on the timings of special dividend related to US investment tax credits, having sold the credits linked to its Texan Dogfish project, and being in the process of selling those linked to Big Rock.

Of Merriweather’s appointment, Cox said the new director had ‘significant experience in the infrastructure and energy sectors’ and has board experience.

‘The work continues with the independent third-party agency in relation to succession planning, ensuring an orderly transition and the appointment of appropriately skilled directors,’ he said.