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Best and worst: Smaller companies trusts

Caroline Merrell
Saturday 25 June 1994 23:02 BST
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OVER the last year, investment trusts holding shares in unquoted smaller companies outperformed those invested in quoted smaller companies.

Three of the top five performers were venture capital funds in a combined sector made up of eight UK venture capital trusts and 32 UK smaller company trusts.

The Sumit trust demonstrated over one year the spectacular returns that can be produced by successful investment in small unquoted companies. The fund invests a maximum of pounds 2m in companies up to the pounds 10m size and currently holds shares in eight companies. It has a fixed lifespan and is preparing to wind down. At present, the fund trades at a 17 per cent discount to net asset value.

The venture capital company, 3i, this week announced a price of 272p for its flotation as an investment trust - a 13.5 per cent discount to net asset value. 3i invests in about 3,500 companies valued at pounds 1m to pounds 50m.

The discount on many of the UK venture capital investment trusts has been widening in anticipation of the float because the market expects 3i to soak up much of the money from private individuals who would invest in venture capital funds.

English and Caledonian, run by Gartmore, switched 15 per cent of its investments into quoted companies last year, to increase liquidity. Over the last six months the discount on the fund has risen from 16 to 24 per cent.

Moorgate expects recovery will boost its two investment trusts, which are heavily invested in smaller quoted manufacturers, each valued at up to pounds 100m.

------------------------------------------------------------------------ UK venture capital and investment trusts ------------------------------------------------------------------------ The best % 1 Sumit 266 2 English and Caledonian 167 3 Murray Enterprise 155 4 Abtrust Scotland 151 5 Berry Starquest 143 The worst 36 R&M Smaller Companies 106 37 Moorgate 104 38 Abtrust Smaller Companies 102 39 Edinburgh Small 101 40 Moorgate Smaller Companies 97 ------------------------------------------------------------------------ The table shows performance as percentage growth over one year, net dividends reinvestedSource: SG Warburg ------------------------------------------------------------------------

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