Schroder British Opportu... Share Discussion Threads

[chucko1] 03/2/2021 13:42

Index futures require little cash. You buy them on an exchange and put up a certain amount of initial margin, adding or subtracting variation margin as the value of the contract changes. That leaves the majority of the cash to be placed on deposit.

The futures contract itself required no funding and nor does it accrue any interest. So not sure about the negative income.

Margin requirement on this futures contract (YBYH1) is very close to 10% and likely pays interest of SONIA, so basically nowt.

[spectoacc] 03/2/2021 13:02

Not sure I know enough about Index Futures, other than that it'll be cash-settled in March. But yes - could be the negative income, ie the cost of holding more than offsetting the yield?

Curious place to park the cash.

[jonwig] 03/2/2021 12:17

That could be the negative income we were talking about.

[cc2014] 03/2/2021 12:00

Morningstar have the same information

It looks like a Mar 21 Futures contract to me and I would agreet, it's just somewhere to park the cash until they invest it elsewhere.

Nothing wrong with that but it would be nice of them to say

[cc2014] 03/2/2021 10:17

Target returns The Company aims toprovide a NAV total return of 10% p.a.²
(once the Company is fully deployed across the target allocation between
public and private equity investments) over the life of the Company

And then according to HL they don't even mention their largest investment which is 29% in what looks like a March 21 FTSE index future:


Where HL get their information I'm not sure as I can't see a monthly factsheet on SBO. Perhaps someone in morningstar or national storage mechanism.


Anyways if that's right and part of their strategy is simply to buy a FTSE250 tracker on which they get their management fee this is a disgrace.

My apologies for the rant if I've misunderstood.

[jonwig] 03/2/2021 07:27

Some odd choices in there (Trainline???) but of course timing is key.

[spectoacc] 03/2/2021 07:20

Not saying they don't know what they're doing but... Does feel much like Woody Woodford, too much to spray around at every idea they can think of.

(Copy/pasted but won't format - their Top 10 is 30% of the fund but all tiny positions in big co's. Trainline, NEX, Breedon...).

Edit - Graphcore is a $2.7bn co at last valuation, which SBO own £2.9m of. Not saying not a good investment - looks an interesting co - but no influence whatsoever & not exactly in early.


Rapyd Financial Network 2016 Ltd Target Global Fund

3,227,862

4.4

Graphcore Limited - Series E Preferred Shares

2,912,902

3.9

Trainline PLC NPV

2,307,183

3.1


Learning Curve Group Ltd Agilitas Boyd 2020 Fund

2,186,914

3.0

Blue Prism Group Plc Ord GBP0.01

2,151,986

2.9

National Express Ord GBP0.05

2,033,485

2.7

Ibstock Plc WI Ord GBP0.01

1,998,460

2.7

Ascential PLC Ord GBP0.1

1,951,437

2.6

GB Group Ord GBP0.025

1,763,506

2.4

Breedon Group PLC NPV

1,730,848

2.3


22,264,581

30.0

[spectoacc] 20/1/2021 14:43

Reminds me a bit of the early days of Menhaden - an optimistic focus on green credentials, followed be a slump and widening discount as the stockpicking was exposed as naff.

MHN (coincidentally also a holder of Calisen) back above par after 5 years, but only thanks to punting the likes of VW, Airbus etc. Not so green.

Unless the Schroder Juniors are exceptional stockpickers (they're not, or would stop at eg 10 picks), agree the discount needs to be c.20%. Can see it moving to that when the NAV falls.

[jonwig] 20/1/2021 14:37

Today's statement is 90% air bubbles (and the NAV is quite depressed).

What they are doing looks a lot like the build up of a new VCT without the tax breaks, apart from the fact that the private companies are too large to qualify for VCT status.
So if it couldn't be a VCT for this reason, it maybe ought to be valued as one - ie. a double-digit discount.

[spectoacc] 20/1/2021 14:13

Perhaps not the top, but they undoubtedly needed to get launched pre-vaccine news.

SUPP/SBO's RNS's are refreshingly thorough from the Schroder Juniors, but read like a school essay. This made me laugh:

"...Was corroborated within the first two weeks of SBO's launch when one of our holdings was bid for - a first for the portfolio."

Two weeks in, just about everything that happens is a "..First for the portfolio" :)


They're selling themselves on their superior stock-picking skills, mixed with the PE punts. But the PE stuff is a long way from early-stage - not necessarily a bad thing, but they're not going to make multiples on it, and are buying miniscule stakes with no control or influence.

The fact they bought PRSM, it released a less than perfect RNS and fell, so they bought more, suggests they're not going to get it right IMO. No real conviction to a portfolio heading towards 30+ holdings, and only holding its own thanks to the fortunate early bid.

But good luck to them.

Do wish they'd sort out Cum/Ex income tho, looks very amateurish.

[cc2014] 20/1/2021 14:09

Not sure what I think either. I can't really see what they are doing which is different than anyone else in order to deliver the around 10% target return.

Probably not my sort of investment until the NAV gap appears.

I'll leave it on my watchlist and watch with interst.


More than anything I perceive the fund was launched 4 months too late and may be investing near the top.

[spectoacc] 20/1/2021 13:21

"The portfolio currently includes twenty-three public equity and three private equity holdings and we are now more than 70% invested. "

A thorough, SUPP-style RNS just out from SBO. Not sure whether to be impressed or taken aback by what total punters they are.

Some good buys, but mixed with some strange ones. TRN for eg, or PRSM which they've averaged down, and has at least one shorter on it (questions about growth rate vs revenue). Calisen made them a swift 30% profit when it was bid for, yet fairly meaningless in a portfolio of punts that's up to 26 holdings already.

[spectoacc] 14/1/2021 10:51

@CC2014 - I'd like to know their listed buys too, since the NAV has risen from 98p (ex-costs float NAV) to 101p.

Agree the stakes must be tiny.

[cc2014] 14/1/2021 10:12

I'm not sure SpectoAcc. With the P/E investments they seem to be putting tiny amounts in compared with the total raised by those looking for money.

Perhaps as if the company looking to raise money is pitching it to a wide audience.

I an intrigued to see how this plays out.

[spectoacc] 14/1/2021 09:27

I reckon 20% discount warranted, but yes - they're doing what they said they'd do so far.

Can't see them reaching this stage with SUPP - Kymab clears half the OD, and hopefully ON the other half later this year, with a few tens of millions left over. But just about every co in SUPP needs more money. Both of the big ones - RUTH and ATOM - need it this quarter, and won't be getting it from SUPP.

Interesting how much work the SUPP managers are putting in to SBO.

[cc2014] 14/1/2021 09:11

Agreed. Seems a decent enough investment and shows what they could do with SUPP once the overdraft is paid off.

The question is whether they are investing at the top of cycle (Tesla type bubble).

I said I wouldn't be interested until this got to a 10% discount to NAV. Now, I see what they are investing in I'm a little more optimistic but on the other hand these investments are more risky than I had anticipated.

I am surprised so much volume is going through at 96-97 so soon after launch.

[spectoacc] 14/1/2021 08:59

Rapyd seems another good co - none of them particularly early-stage, no amounts given (presumably small), but if the tech boom continues, perhaps a chance for early exit in a listing.

Meanwhile, SBO without stabilisation continues.

[jonwig] 13/1/2021 17:12

Yes - "purchase" is what it says. Apologies.

[spectoacc] 13/1/2021 15:50

Purchase I think? Which would make more sense - more sense than the Cum/Ex income :)

[jonwig] 13/1/2021 14:57

I see a director sold shares on 11/01 under a "trade plan".
Whatever that is!

[spectoacc] 13/1/2021 14:18

Feels like the end of stabilisation for SBO - slightly harsh on shareholders, been nothing wrong with the NAV so far (beyond the obvious, as spotted by @Jonwig!).

[spectoacc] 31/12/2020 09:27

Getting in earlier would have been handy - SBO raised £75m, have position limits, and unlisted limits, so it must be a miniscule investment. A few million at most in a $2.5bn co. But does look decent quality.

Looking at that Cum/Ex income reporting - we have to be missing something, an error like that wouldn't persist this long. Negative income..

[jonwig] 29/12/2020 15:38

FT on the Graphcore fundraising:



Raised $222m valuing company at $2.5bn pre-funding.
Certainly looks a promising company!