LONDON (Alliance News) - The Chelverton Growth Trust Thursday said it underperformed its benchmark in the first-half, but Chairman Kevin Allex said the UK's economic recovery should be good for the trust's portfolio.
"Looking forward to the second half of the year, with the recovery in the UK beginning to get stronger and broader, we can expect further growth in the value of the portfolio," Allen said in a statement.
The trust's net asset value per share increased to 49.98 pence from 44.87 pence in the six months to the end of February, an increase of 11.4%. In the same period the company's benchmark index, the MSCI Small Cap UK index increased by some 17.2%.
Allen said the underperformance was due to the volatility of Nasdaq OTC holding One Horizon. He said the holding has had "a disproportionate effect" on the performance.
In the past six months, the trust sold holdings in Sanderson, and Richoux. It also reduced holdings in IDOX, Alliance Pharma, Northbridge and A B Dynamics.
A B Dynamics floated on AIM in May 2013 at 86 pence. The Chelverton Growth Trust said it disposed of half its holding in the company at an average price of 171 pence.
In the unquoted portfolio there were increases in the valuations of Parmenion Capital Partners, Transflex, and the loan stock of Closed Loop Recycling, the trust said.
"Unfortunately we have made a provision against the investment in Airways Engineering, as the expected orders have not materialised. In addition have we reduced the holding price of Main Dental, as it has taken longer to acquire and integrate the dental practices than expected, although real progress is now being made. All the valuations in the unquoted portfolio were made by the board prior to the tender offer," Allen said.
"A new investment was made in the MBO of Chelverton Asset Management, the investment managers of this fund and other successful funds investing in Small and Mid-Cap quoted shares and in Unquoted Companies," he added.
The company's objective is to provide capital growth through investment in companies listed on the Official List and traded on AIM with a market capitalisation at the time of investment of up to GBP50.0 million, which are believed to be at a "point of change."
The company also invests in unquoted investments if it thinks there is a likelihood of the shares becoming listed or traded on AIM or the investee company being sold. Its investment objective is to increase net asset value per share at a higher rate than other quoted smaller company trusts and the MSCI Small Cap UK index.
The trust's shares were Thursday quoted at 43.25 pence, untraded.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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