Investment company H1 2021 review

Fundraising hits record and assets reach all-time high.

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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.

-ENDS-

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Notes to editors

  1. Secondary fundraising is by existing investment companies from 1 January to 30 June 2021. Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury. Source: AIC/Morningstar. The previous half-year record for secondary fundraising was H1 2019 when £4.1bn was raised.
  2. Investment company industry assets were £249.297bn at 30 April 2021 compared to £249.289bn at 31 May 2021. The previous all-time high for investment company industry assets was £239.035bn on 31 March 2021. Source: AIC/Morningstar.
  3. Fee data is fee changes implemented from 1 January to 30 June 2021. Source: AIC.
  4. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 361 members and the industry has total assets of approximately £249 billion.
  5. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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