London’s largest IPO since 2017 – September update

7th October 2020

The Hut Group became London’s largest IPO since 2017 with a market capitalisation of over £5bn. An online retailer and technology company, founded in Manchester in 2004, it had considered a US listing before London relaxed its rules to allow the founder a golden share which will allow him to block a hostile takeover for three years.

Global markets had a difficult month with elevated volatility once again a feature. Rising coronavirus cases and fears of further lockdowns being the principal culprit due to the negative impact this will have on the nascent economic recovery. Sterling gave up some of its recent strength over growing fears of a no deal Brexit as Boris Johnson threatened to override the previously agreed withdrawal bill with the EU.

The significant discount of the UK market relative to other major markets was highlighted as foreign suitors bid for former FTSE 100 constituents G4S and William Hill. We expect to see more of this if the differential remains this wide.

We were again active in the primary markets following a quiet August. We are continuing to see a broad range of companies seeking fresh capital – from those seeking to shore up their balance sheets ahead of a possible ‘second wave’ to those that see growth opportunities in a world where certain trends, such as digital and healthcare, have been accelerated by the pandemic.

We added CentralNic, Watches of Switzerland, The Hut Group and Greencoat UK Wind to the portfolio whilst exiting our holding in Network International.

In September, the MFM UK Primary Opportunities fund returned -4.2% compared with -1.7% for the FTSE All Share and -1.8% for the IA UK All Companies sector. The Fund’s underperformance was principally as a result of a sales warning from Diaceutics, one of our largest holdings which lost a third of its value and a number of our more recently added consumer & leisure companies selling off over further COVID lockdown fears. We continue to believe in the high quality nature of these companies, despite the current headwinds.



CentralNic is principally an internet domain service provider whilst also offering services such as website builds and online brand protection services. We acquired the shares at a 10% discount as part of a £30m raise to fund the purchase of two significantly earnings enhancing companies.

Watches of Switzerland

WoS is the largest retailer of luxury watches in the UK and also has a growing presence in the US. Its high street brands also include Mappin & Webb and Goldsmiths. A FTSE 250 company, we acquired the shares at an 8% discount to the previous night’s close. We consider the company a high-quality operator in a growing marketplace that has weathered the pandemic well thus far.

The Hut Group

Hut Group is a fast-growing online retailer of premium healthcare and beauty products and owns websites including and It also helps global brands – clients include Nestle and Coca-Cola – sell their products direct to the consumer by utilizing the company’s online expertise. We acquired the shares at IPO in what was the largest IPO on the London market since 2017, with a market capitilisation of £5bn. The shares have appreciated 20% since purchase.

Greencoat UK Wind

Greencoat is a renewable infrastructure fund investing in UK and offshore wind farms. It currently has 36 sites and we participated in the £400m fund raise to reduce debt following recent acquisitions and to allow for investment in further wind farms. The Company offers an attractive dividend yield in excess of 5%, aiming to grow this with RPI.


Network International

Following a raft of short selling on concerns surrounding the solvency of one of its payment partners, we sold our holding on a partial recovery in the share price. Given the high valuation of the company, we are opting to sit on the sidelines for now, awaiting further clarity.


We sold the modest holding in this construction company following an unexpected adverse ruling over one of its contracts.

Please be advised that the past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested.

Cumulative Performance (Total Return %) – September 2020

Fund/Benchmark Name 3M to
6M to
Year to 30/09/2020 3 Years to 30/09/2020 5 years to 30/09/2020 Since Inception (28/05/1997)
MFM UK Primary Opportunities P Acc -3.8 10.1 -12.9 -7.3 31.4 341.0

Quartile Ranking

IA UK All Companies

4 3 2 2 1 2
IA UK All Companies -1.0 13.1 -12.8 -8.0 16.9 218.0
FTSE All Share -2.9 7.0 -16.6 -9.3 18.6 222.0

Source: FE 30/09/2020

Discrete Annual Performance (Total Return %) – September 2020

Fund/Benchmark Name Year to 30/09/2020 Year to 30/09/2019 Year to 30/09/2018 Year to 30/08/2017 Year to 30/09/2016
MFM UK Primary Opportunities P Acc -12.9 -1.1 7.6 22.4 15.8

Quartile Ranking

IA UK All Companies

2 3 1 1 2


IA UK All Companies


-12.8 0.0 5.5 13.7 11.7
FTSE All Share -16.6 2.7 5.9 11.9 16.8

Source: FE 30/09/2020

The past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested. R.C. Brown and Marlborough are authorised and regulated by the Financial Conduct Authority. Marlborough Fund Manager are the ACD. The Key Investor Information Document and the Full Prospectus can be obtained via or by request at: