Schroder British Opportunities
The Schroder British Opportunities Trust (SBOT) targets long-term total returns by investing in a diversified portfolio of private equity investments in predominantly UK companies.
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Tim Creed, Co-Manager Tim Creed is the head of private equity Investments at Schroders Capital. He is a member of the Schroders Capital private equity management committee and a member of the private equity investment committee. He is also on the advisory board of several leading European buyout and turnaround fund managers. Prior to joining Schroders in 2004, Tim worked as a project manager at Aon in London, UK, having previously spent five years at Accenture in strategy consulting and operations consulting, where he worked mostly with financial services companies across Europe. Tim started his career as a research chemist at AstraZeneca
Peraveenan Sriharan, Co-Manager Before joining Schroders Capital Private Equity in January 2022, Peraveenan (Pav) Sriharan worked in the Schroders Corporate Development team for six years assisting the Group with M&A and other corporate strategic partnership & alliance projects. Prior to that, he was in a dedicated illiquid asset valuation role within the firm with a principal focus of private equity investments. Before joining Schroders, Pav worked at Standard & Poor’s for five years within their Valuation and Risk Strategy services function with a focus on Private and Illiquid Debt. Pav holds a BSc honours in Actuarial Science from the Cass Business School, London and is a CFA charterholder.
Tim Creed, Co-Manager Tim Creed is the head of private equity Investments at Schroders Capital. He is a member of the Schroders Capital private equity management committee and a member of the private equity investment committee. He is also on the advisory board of several leading European buyout and turnaround fund managers. Prior to joining Schroders in 2004, Tim worked as a project manager at Aon in London, UK, having previously spent five years at Accenture in strategy consulting and operations consulting, where he worked mostly with financial services companies across Europe. Tim started his career as a research chemist at AstraZeneca
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Peraveenan Sriharan, Co-Manager Before joining Schroders Capital Private Equity in January 2022, Peraveenan (Pav) Sriharan worked in the Schroders Corporate Development team for six years assisting the Group with M&A and other corporate strategic partnership & alliance projects. Prior to that, he was in a dedicated illiquid asset valuation role within the firm with a principal focus of private equity investments. Before joining Schroders, Pav worked at Standard & Poor’s for five years within their Valuation and Risk Strategy services function with a focus on Private and Illiquid Debt. Pav holds a BSc honours in Actuarial Science from the Cass Business School, London and is a CFA charterholder.
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Investment process
Having initially been launched as a vehicle targeting both public and private UK businesses, SBOT has recently announced it is moving to a fully private offering. SBOT currently has around 80% of its NAV in private assets, but also has a number of smaller public holdings which will eventually be transitioned out of, over a period of time. Once this is concluded, the new portfolio will hold between 20-30 private holdings. SBOT will have a prominent focus on growth and buyout (mid and small) opportunities.
The team believe that high- quality deal sourcing is an essential part of long-term success and use their extensive network of European specialist GP relationships. These efforts are further supported by technology, databases and third-party data.
The investment process covers deal flow (the likes of relationship management/access to top deals as well as initial assessment); this then moves to pre-qualification (reviewing the investment opportunity and due diligence); there is then a final qualification phase (speaking to management, ESG assessment, one-on-one meetings with the investment committee, legal and tax due diligence and investment recommendation); execution (structuring and closing of the deal) and monitoring (attending AGM and follow-on financing needs).
Risk
The trust invests in private equity companies, which can be difficult to value. Information from underlying investee companies may be delayed, missing or restricted which would lead to valuations being made on incomplete information. It is difficult to accurately time the exit of private equity investments. Exits will take time and the portfolio managers may have very little influence on any decisions around the timing on exits. However, the team have a huge resource in the private equity field, with over 50 investment professionals and over £17bn of assets managed in this space.
ESG
ESG - Integrated
The private equity team have their own dedicated ESG specialists – they will then collaborate to maximise the overall ESG impact across both segments of the portfolio. ESG is present across all three stages of the trust’s investment process. The selection process has both exclusions that go against the firm’s ESG principles (tobacco, gambling and fossil fuels) as well as a positive screen favouring investments which follow the UN’s 17 Sustainable Development Goals (SDGs), which define the biggest challenges facing global societies.
The next stage is assessment criteria, where the team uses tools to provide greater clarity on sustainability features. Examples include SustainEx, which quantifies the positive and negative impacts on the environment and society, while the World-check service conducts contracting third-party risk assessment. The final stage is engagement (interacting with portfolio companies to encourage and enforce positive change with regard to SDGs and ESG) as well as enhanced ESG reporting.
Gearing
The managers are able to gear up to 10% of net asset value, calculated at the time of drawdown.
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