Realise that participating in the launch of a new Investment Trust is not always the wisest move as is amply demonstrated by the dismal performance of star fund manager Neil Woodford’s Patient Capital Trust (WPCT). Since its launch at £1 per share in April 2017 its shares have markedly underperformed the market, and, at 80p, are now languishing at a 8.2% discount.
Nevertheless, it might be worth casting an eye over Odyssean Trust (OIT), a small cap investment trust, which is being launched next month by Stuart Widdowson, the former investment manager of Strategic Equity Capital (SEC), one of the most successful small cap investment managers. (It plans to issue 100m shares at £1 with trading starting on May 1st).
Widdowson quit SEC a year ago to set up Odyssean Capital, a boutique fund manager with the backing of Christopher Mills’ Harwood Capital, and Ian Armitage, former chief executive of HG Capital, one of the biggest private equity trusts. Armitage, who had worked with Widdowson at HG Capital before switching his allegiance to SEC where he had a 5% stake at one stage, is non-executive chairman of Odyssean Capital, and will invest £6.6m, for a 6.6% stake in the new trust.
Harwood Capital, Widdowson’s joint venture partner, plans to invest £13.4m, Widdowson and family will be investing £1.2m, and the trust’s four non-execs will invest £660,000. They have also agreed to invest their director’s fees net of tax in the trust’s shares on an ongoing basis.
http://www.odysseancapital.com/uploads/1/1/3/1/113159793/27.03.18_oit_intention_to_float.pdf
OIT’s stated aim is to “to deliver long term capital growth by investing in high quality quoted companies which have the fundamental ability to achieve meaningful capital growth. The managers’ differentiated approach combines public and private equity investment expertise to create highly focused, unconstrained, long only portfolios of quoted UK smaller companies.” Its portfolio will typically consist of up to 25 holdings, with the top 10 accounting for the majority of the trust’s net asset value, across a range of industries
It is a far from novel investment recipe, and Odyssean is a latecomer to the game of investing in a highly concentrated portfolio of under-researched small cap stocks. Indeed, the fact that the shares of SEC, Widdowson’s former outfit, are currently trading at a 13.9% discount, underlines the risks especially at this late stage of one of the…
It's always good to look at alternatives, but I'm not sure why one would pick this ahead of Standard Life UK Smaller Companies.
That's been run by Harry Nimmo since 2003 and according to Morning Star, has a 10 year CAGR of 17.81% and is available on a very small discount.
According to Morningstar, that's the top performing UK small caps investment trust, ahead of Strategic Equity Capital PLC & others.
Also, checking my records from 2013, SLS was the top performing UK small cap trust in the 10 years prior to that as well.
