PERSPECTIVE3-5 min to read

Schroder British Opportunities Trust – A Year In Review

We look back on the key investment trends in UK public and private companies in the past 12 months, and ahead to the trends that may continue in 2022.



Rory Bateman
Co-Head of Investment and Head of Equities

We believe the rationale for investing in both public and private companies is clear: neither private nor public companies exist in a vacuum and so it is critical that investors be informed of the full landscape, with freedom on where to invest.

Schroder British Opportunities Trust (“SBO”) launched in December 2020 to invest in listed and unlisted small and mid-sized enterprises (SMEs). Here we discuss the progress the Trust has made, the investment landscape and our outlook.

External recognition

We are pleased to have received external recognition for our efforts twice this year. In March SBO was awarded the ‘Most Exciting Investment Company IPO’ accolade at the ADVFN International Financial Awards, whilst in November the Trust was the only vehicle assigned an ‘Elite Radar’ rating by FundCalibre.

IPO and private equity activity at record levels

2021 has seen record levels of initial public offerings (IPOs), as well as listed companies being taken private by financial investors and corporates. We participated in some of this IPO activity, investing in four new listings, all within the theme of ‘digitalisation’, which we believe will endure beyond the pandemic.

Our investments include video games developer and publisher Tinybuild, as well as online review company Trustpilot. We believe that companies must rapidly embrace technology and understand that consumer behaviour will increasingly be focused on online formats; if not they run the risk of being left behind as competitors take share. The pandemic has seen this benefit other sectors such as e-commerce, fintech and marketing, and we expect this to continue.

We were pleased to see one of our public investments, Calisen, receive a bid from a private equity consortium within two weeks of the Trust’s launch, while Blue Prism has also recently been bid for.

And while private equity firms have been busy buying listed companies, we have been busy buying unlisted businesses. The Trust made six investments in private companies, spanning a variety of sectors: semiconductor company Graphcore, payments infrastructure firm Rapyd, digital healthcare business Cera, parking tech company EasyPark, water cooler manufacturer and distribution firm Waterlogic, and education and training business Learning Curve.

Since SBO’s launch, three of these have seen valuation uplifts. It’s unusual for this to happen even once in the first twelve months following investment and isn’t necessarily a guide to the future.

We have confidence in all of our private investments and look forward to announcing further transactions in due course.

Listed companies have raised capital

According to data from Refinitiv, as at 26 November 2021, this year has seen already-listed UK companies raise £23.8bn in follow-on equity. This is a 20% decline versus the same period in 2020, which saw companies raise £28.6bn in equity to strengthen their balance sheets in the wake of the pandemic.

We’ve been pleased to participate in several primary issues since launch: aside from the three of our IPO investments that raised fresh capital, we additionally participated in ten primary equity placings across nine other companies (firms undertaking primary equity placings aim to raise new money from investors).

A central theme of the Trust is to provide fresh equity to great British public and private businesses. Our expectation is that 2022 will see continued primary equity issuances, many of which we hope to participate in.

Mixed fortunes for the travel and leisure sector

The ‘pandemic reopening trade’ was a theme that was expected to benefit the travel and leisure sector as a result of pent-up demand as lockdown restrictions eased. However, the operational performance of pubs & restaurants has been mixed, with some faring better than others. Supply of labour has been an issue, combined with rising food prices.

Occupancy rates in the hotel sector have been rising, although business travellers have been slower to come back (perhaps unsurprisingly given employers are providing greater flexibility to work from home).

We believe in companies with strong balance sheets, particularly those backed by strong freehold assets. This supports our investment cases in City Pub Group and Dalata Hotel Group.

ESG tailwinds have been supportive

With COP26 being held in the UK, the ‘energy transition’ theme has been at the front of investors’ minds. Companies exposed to the power generation or construction/infrastructure end markets that see these tailwinds have done well.

SBO has exposure to this space and has benefited from positions in Volution Group and Genuit Group, although our investment in vanadium battery manufacturer Invinity Energy Systems has not yet been fruitful – a dynamic which we believe is likely to be reversed as the business scales up.


The UK stock market continues to trade at a significant discount to its global peers. Concerns about the UK primarily stem from the downward pressure that continued labour shortages could have on economic growth, and short term rising inflationary pressures.


We believe these issues are transitory, although in the short term, such a backdrop is likely to affect the UK small and mid cap sector more than larger cap stocks. However, we believe this is where active management and stock picking plays a key part. We also expect to see further M&A activity in the wider market, as international players take advantage of both the valuation and currency discounts.


Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. Past Performance is not a guide to future performance and may not be repeated.

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Rory Bateman
Co-Head of Investment and Head of Equities


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