273. The strong growth potential for UK equities

Uzo Ekwue, co-manager of the Schroder British Opportunities Trust, gives an update on performance, the investment strategy and the current 30% discount to the market. Uzo emphasises the trust’s focus on both private and public assets, particularly in the mid and small-cap space, and tells us why they see a mispricing of private assets due to market sentiment. We touch on examples within the portfolio, illustrating the range of size, mergers and acquisitions in the UK and ultimately the exciting opportunity for investors to be a part of the strong growth potential of the trust’s underlying assets.
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The Schroder British Opportunities trust (SBOT) aims to take advantage of the less popular reputation of UK equities, through investing in both private and public assets. The managers focus on companies that have faced difficult situations. The trust’s portfolio includes 30 to 50 smaller and medium-sized businesses, both public and private, that need more investment. We think this trust is in a good position to benefit from the attractive prices of UK stocks and to help strong UK companies that face tough challenges.

What’s covered in this episode: 

  • What caused the trust to trade at a discount of around 30%
  • How negative market sentiment influenced the share price
  • The trust’s mispricing, in particular private assets, explained
  • What is needed to change sentiment around the UK?
  • The evolution of the trust’s exposure to private assets
  • What is a “beat and raise” phase for markets
  • The focus on small and mid-caps, with examples of Bytes Technology and Judges Scientific
  • M&A activity in the UK
  • Why now is a good entry point into UK equities
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