Global investment manager Schroders announced the launch of the Schroder British Opportunities Trust plc, which will invest in high-quality, small and mid-sized UK companies with sustainable business models. The firm stated that the new trust aims to invest in the future growth of British Business, both public and private, while supporting UK employment through the pandemic and beyond.

According to Schroders, the trust is being launched now in response to the current challenging market conditions, targeting companies that may require additional equity either to maximise their growth potential or to return them to their previous growth trajectory. The firm intends to raise £250 million, via an initial public offering, to invest in a proactive public and private equity investment strategy, which aims to provide long-term total returns.

The new trust’s investment team will be Schroders’ senior investors Rory Bateman, Head of Equities and Tim Creed, Head of UK and European Private Equity.

Bateman said:

“This is a once-in-a-generation opportunity to invest in the future of British business and produce substantial returns while making a positive impact.

“The companies that require funding are often too large to be the focus of government initiatives, but too small to have the necessary impact with banks or credit markets. The current level of UK government debt-driven support is unsustainable and as support comes to an end, we believe many high-quality UK growth businesses will require an injection of ‘fresh’ equity to grow and succeed through the pandemic and beyond.”

 Creed added:

“At Schroders, we have a long heritage of investing in both UK public equity and UK private assets. In managing the Schroder British Opportunities trust, we will leverage our full public and private equity capabilities, capitalising on our investment trust expertise and our considerable experience of managing hybrid public and private equity strategies.”

Schroders stated that the new initiative will promote a long-term focus on sustainability from investee companies by encouraging incorporation of the UN Sustainable Development Goals (SDGs) into their business planning, the adoption of best ESG practices and disciplined capital allocation.