Schroder Real Estate Investment Trust Ltd · LSE:SREI
Schroder Real Estate Investment Trust — Schroder British Opportunities Trust — H1 2025 Earnings Presentation
43 slides from Schroder Real Estate Investment Trust's earnings presentation, December 2024
Slide 1: Schroder British Opportunities Trust plc Half Year Report & Accounts
Marketing material Schroder British Opportunities Trust plc Half Year Report & Accounts December 2024 Rory Bateman Tim Creed Co-Portfolio Manager Co-Portfolio Manager Public Equity Private Equity
Slide 2: Powerful combination of public equity and private equity expertise
Powerful combination of public equity and private equity expertise Rory Bateman Tim Creed Co-Head of Investments and Co-Head of Equities Head of Private Equity Investments Member of Schroders’ Selected as one of '50 Most Influential People in General Management Committee European Private Equity‘1 Co
Slide 3: Why Public Private?
Why Public Private? Private Equity offers access Ability to invest in to high quality companies, Enhanced universe: we can attractive UK companies with strong valuation search for the best stocks that are currently priced at creation potential, not whether public or private a substantial discount to
Slide 4: Overview
Overview Financial performance Portfolio overview Outlook Net asset value decreased by 2.4%, Focus on growing and mostly profitable Opportunity in quoted UK companies from £81.3 million as at 31 March 2024 companies that have strong balance sheets UK small and mid-caps, and consumer to £79.4 million
Slide 5: Long-term performance
Long-term performance Share price and Net Asset Value since inception to 30 September 2024 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally
Slide 6: Portfolio performance (6 months to 30 September 2024)
Portfolio performance (6 months to 30 September 2024) NAV decrease driven by revaluation in unquoted holdings £m 81.3 79.4 (1.9) Quoted +0.1 Unquoted -2.2 Money market +0.2 funds Past performance is not a guide to future performance and may not be repeated. The value of investments and the income fr
Slide 7: Key positive and negative performers
Key positive and negative performers 6 months to 30 September 2024 Top 5 contributors Contribution % Bottom 5 contributors Contribution % HeadFirst +1.0 Rapyd -3.8 Volution +0.7 Learning Curve -1.1 Graphcore +0.6 Cera Care -0.6 Watches of Switzerland +0.6 SSP -0.5 Expana (formerly Mintec) +0.6 Disco
Slide 8: Calendar year performance – Schroder British Opportunities Trust plc
Calendar year performance – Schroder British Opportunities Trust plc Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rat
Slide 9: Fund risk considerations
Fund risk considerations Concentration risk. The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the company, both up or down. Counterparty risk. The Company may have cont
Slide 10: Top 10 holdings (as at 30 September 2024)
Top 10 holdings (as at 30 September 2024) 31 March 2024 30 September 2024 Quoted/ % of total equity % of total equity Top 10 holdings Fair value (£’ ) Fair value (£’ ) unquoted investments investments Expana Unquoted 9'596 13.3% 10’056 13.9% Cera Unquoted 8'065 11.2% 7’605 10.5% Pirum Unquoted
Slide 11: Portfolio positioning
Portfolio positioning Investment portfolio (excluding cash) as at 30 September 2024 Public/Private (%) Industry (%) Textiles, Apparel & Specialty Retail, 3% Luxury Goods, 1% Building products, 4% Diversified Consumer Services, 9% Electrical Equipment, 3% Financial Services, 2% 29% Ground Transportat
Slide 12: Private equity strategy and performance
Private equity strategy and performance
Slide 13: Contextualising our PE focus
Contextualising our PE focus Investment strategy by company lifecycle stage The Company’s target areas for private equity investments Venture Venture Small Mid Large/mega Growth Turnaround seed/early late/pre-IPO buyout buyout buyout Areas of heightened valuation risk* – areas with greatest amount o
Slide 14: Private equity allocation attribution – 6 months to 30 September 2024
Private equity allocation attribution – 6 months to 30 September 2024 Company events, valuation multiple and FX has driven the valuation decline £ millions 0.4 2.9 (1.8) (0.7) (1.7) (0.7) 52.9 51.3 Transactional activity at Company performance and valuation portfolio companies Q1-24 Net capital acti
Slide 15: PE allocation demonstrating strong aggregate performance since launch
PE allocation demonstrating strong aggregate performance since launch % of total Invested Total TVPI* Investment equity Commentary Status capital value investments 13.9 Organic revenue growth remains robust and the AgriBriefing integration has progressed well 10.5 Achieved significant milestone of d
Slide 16: Private equity strategy
Private equity strategy Growth Growth/Buyout Buyout - Emerging companies - Mature companies - Established companies - Technology and/or market risk - Valuation and execution risk - Valuation and execution risk - Early revenue generating - Moderate growth - High growth - High growth - Profitable - Pr
Slide 17: SBO strategy in action
SBO strategy in action Key drivers of growth for SBO’s private equity investments Robust organic revenue Large transformational Company Multiple add-on acquisitions growth acquisition/merger Yes Yes Yes Yes Yes Yes Yes Yes (not closed yet) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes For illu
Slide 18: Case studies
Case studies Top 5 holdings Company Parking tech company that helps Global commodity price data, price Europe's largest provider Leading provider of post-trade drivers to find, manage and pay Technology driven global Background forecasts & market intelligence of digital-first home automation and col
Slide 19: New private equity investment
New private equity investment Acturis Background - Acturis is a leading global insurance software provider offering administration, distribution, and underwriting capabilities - This investment will represent the 11th private equity investment made by the Company since inception. Th C mp y’ m - Inve
Slide 20: Public equity strategy and performance
Public equity strategy and performance
Slide 21: Public equity strategy
Public equity strategy 1 – Opportunity set We screen for growth companies in the UK1 that are listed on the FTSE AIM, FTSE Small Cap and FTSE 250 indices with a market cap range between £50m and £2bn. 2 – Identifying a Growth Gap What we look for Market inefficiencies often drive material difference
Slide 22: Public equity sleeve composition – 30 September 2024
Public equity sleeve composition – 30 September 2024 Concentrated towards consumer discretionary, industrials and technology stocks Other Materials Health Care 2% 2% 3% 37% Consumer Discretionary Financials 6% • The public equity sleeve has its largest allocation to this area of the Consumer Discret
Slide 23: 7 of our public companies have been taken over since launch
7 of our public companies have been taken over since launch* Private equity and corporates recognising strong growth profiles in the portfolio Bid: December 2020 Bid: September 2021 Bid: May 2022 Bid: July 2024 Total return: 30.4% Total return: -18.2% Total return: 53.2% Total return: -20.0% Calisen
Slide 24: Public equity performance
Public equity performance The public equity portfolio contributed to performance over the period Key contributors A good set of results, where the company reported stronger than expected growth A reassuring trading update where its year-end financial guidance was maintained Key detractors Investor c
Slide 25: Two new public investments
Two new public investments UK-based low-priced cosmetics company building UK focussed brick manufacturer scale in the US and Europe – The brick market is tight in supply. 200m bricks will come on – There is a significant opportunity for it to expand its client stream in the next 12months, but this i
Slide 26: One complete sale
One complete sale – We exited our position following a bid from Informa Stocks mentioned are for illustrative purposes only and should not be viewed as a recommendation to buy or sell. Logos are the property of the companies shown. Source: Schroders, September 2024. 26
Slide 27: The opportunity in UK SMID cap public equities
The opportunity in UK SMID cap public equities
Slide 28: Questions on a fund manager's mind in 2024
Questions on a fund manager’s mind in 2024 Geo-political, de-globalisation and Central Bank Policy Soft vs Hard landing supply security and Bond Yields Valuations Political change / elections Climate change markets, stocks M&A Market rotation Inflation Activism Value vs growth Source: Schroders 28
Slide 29: AIM company fears overblown
AIM company fears overblown 20% inheritance tax applied to junior market L d ’ m m k w y 5 % ff m IHT pp d c FTSE AIM (rebased to 100) before and after UK Budget 102 101 100 99 98 • UK government “did not quite throw in the hand grenade that many expected”. • The measures, which will still see a 50%
Slide 30: Long term Mid 250 outperformance
Long term Mid 250 outperformance …of most developed market indices over the last 24 years FTSE 250 ex Investment Trusts vs Large developed markets, Total Return, % 800 700 FTSE 250 ex IT 600 S&P 500 500 400 FTSE World Europe ex UK 300 FTSE 100 200 100 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2
Slide 31: UK SMID versus UK Large sized company performance
UK SMID versus UK Large sized company performance Short term underperformance creates longer term opportunity Material long-term outperformance of mid-sized But c25% underperformance over last 3 years companies over last 25 years 800 130 Large Mid 700 120 600 110 500 Small & Mid 400 100 Small 300 90
Slide 32: Why seek a focused small cap strategy?
Why seek a focused small cap strategy? M&A a significant, accelerating factor Value of completed acquisitions as % of index starting market cap 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD FTS
Slide 33: UK equity performance
33 10 15 20 -20 -15 -10 0 5 -5 UK Smaller Cos UK Equity Income North America UK All Cos Japan Global Equity Income Source: Investment Management Association, Lipper, August 2024. Global UK equity performance Europe ex UK IMA Global asset class performance (%) 1 year Europe inc UK Past performance is
Slide 34: UK economy shows improving fundamentals
UK economy shows improving fundamentals Across a number of measures – here are six for starters UK private business investment¹ UK labour market fundamentals³ 110 110 77.5 100 105 76.0 90 100 74.5 80 70 95 73.0 60 90 71.5 50 85 70.0 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024 2000 2004 2008 20
Slide 35: Why invest in small companies?
Why invest in small companies? Looking at SMID alone, we see UK SMID valuation as attractive vs the global set MSCI SMID indices 12m fwd P/E1 22 10th - 90th percentile 20 18 18.4 16 15.9 15.4 14.5 14 13.3 13.0 12.7 12.6 12 10 8 USA Small Mid World Small AC World Small EM Asia Small Mid Japan Small M
Slide 36: Valuations make the UK market attractive
Valuations make the UK market attractive Deals done by subsector in 2023 Mining Transport Food 3% 2% Financials 3% Technology 5% 17% • There were 40 transactions of >£100m announced in Media 2023, with the pace increasing through the year 8% • The activity was predominantly in the smaller company Le
Slide 37: Outlook
Schroders Outlook
Slide 38: Looking to the future
Looking to the future Private equity allocation Access to larger universe of Well placed to invest has performed well since high quality, high growth further on the public side of launch and excited for companies means we have the portfolio as the UK future progress and no shortage of investment mar
Slide 39: Appendix
Schroders Appendix
Slide 40: Fund risk considerations
Fund risk considerations Concentration risk. The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the company, both up or down. Counterparty risk. The Company may have cont
Slide 41: Market data disclaimers
Market data disclaimers MSCI index: Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is inte
Slide 42: Important information
Important information The material is not intended to provide, and should not be relied on for accounting, legal or tax advice. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sector
Slide 43: Important information
Important information Marketing material • Any reference to regions/ countries/ sectors/ stocks/ securities is for illustrative purposes only and not a recommendation to buy or sell any financial instruments or adopt a specific investment strategy. • The material is not intended to provide, and shou
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