Schroders to raise £250m for investment in Covid winners
Schroders is set to raise £250m for a new investment trust preparing to float in London that will plug cash into companies that have prospered during the pandemic.
Schroders British Opportunities Trust has earmarked 22 listed and private companies for fresh equity, including technology and healthcare firms that have fared well throughout the coronavirus crisis.
In a statement, the firm said the pandemic presented a “once in a generation opportunity” to invest in “high quality, high growth UK companies”.
The trust plans to invest up to £15m in as many as 50 companies within two years, through a scheme that allows investors to cash out after around seven years.
The intention to float notice and prospectus is expected as early as next week, the company said.
The London stock exchange has seen its lowest number of public flotations for several years, according to Peel Hunt, as the pandemic threw the financial landscape into turmoil.
Many companies have been kept afloat by state-backed loans since the first national lockdown in March, which tipped the economy into its worst recession on record.
Schroders today said the pandemic has left too much debt and too little equity available for companies, while the government’s debt-driven support was “unsustainable”.
Neil England, chair of Schroder British Opportunities Trust, said the pandemic has created investment opportunities in many established businesses that are currently “mispriced”.
“Several of these companies have already been identified as candidates for early investment,” England said.
“We are pleased to announce the launch of this timely and differentiated investment strategy with Schroders. Recent events have created investment opportunities in a number of quality companies with high growth potential.”
The offer opens next Tuesday, with shares due to start trading on the London Stock Exchange on 1 December.