IFSL RC Brown UK Primary Opportunities | Fund Update | October 2021

9th November 2021

October: Write the FTSE 100 off at your peril

October saw global equity markets put behind them the falls in September with strong gains in all major markets. The UK was a relative laggard albeit the FTSE 100 still managed to reach its highest level since February 2020. Much has been written about the demise of the FTSE 100 given the large weightings it has to so called ‘old economy’ sectors such as oil, mining and banking. We believe the case for the demise has been over stated. Whilst the past decade has seen disappointing share price returns from mega caps such as Lloyds, HSBC, BP and Royal Dutch Shell, 2021 has seen a sharp recovery in their share prices as the economic recovery has unfolded. The expectation of higher interest rates has boosted banks as it should allow them to increase their margins, whilst oil, at 7 year highs, has dramatically increased the profitability of major oil companies. In our view, these mega caps continue to offer value and pay attractive and growing dividends. We continue to own them and investors ignore this value at their peril. The FTSE 100 (+2.2%) strongly outperformed both the mid cap FTSE 250 (+0.5%) and the FTSE Small Caps (-0.3%), underlining why we favour owning a well-diversified portfolio across different sectors and market capitalisations.

Markets began the month in retreat as investor jitters over the impact labour shortages and supply chain disruption would have on inflation and companies’ earnings. However, once the market accepted that interest rate rises are a reality, and necessary to curb higher than anticipated inflation, gains were made. A solid earnings season also propelled markets higher.

We participated in primary placings in Tritax Big Box, JTC and ITM Power and a secondary placing in Trustpilot. We also added to the holding in Elixirr International. We are currently reviewing a number of attractive IPO opportunities.

In October the IFSL RC Brown UK Primary Opportunities Fund returned 0.94% compared with 1.82% for the FTSE All Share and 0.31% for the IA UK All Companies sector.


Tritax Big Box

Tritax is the UK’s largest listed investor in logistics’ warehouses, an area that has seen significant interest due to the growth in e-commerce. We acquired the shares at a 5% discount as part of a £300m equity raise to fund further investments. A constituent of the FTSE 250 with a market capitalisation of £4bn, we view the shares as a stable investment with a growing dividend income stream.


JTC is a FTSE 250 professional services company providing fund administration and legal services. We acquired the shares as part of an £80m equity raise to fund the acquisition of a US fund services company. We view it as an attractive, earnings enhancing deal and the shares have appreciated by 10% since purchase.

ITM Power

ITM is a clean energy storage and clean fuel company, manufacturing products through its technology that produces hydrogen using only renewable electricity and water. We acquired the shares as part of a £250m placing. The money will be used to increase its manufacturing capabilities. The shares have appreciated over 20% since purchase.


Trustpilot, a FTSE 250 constituent, is a global digital platform for consumer reviews and insights. A strong Trustpilot rating is considered very important to retail focused businesses, giving consumers confidence to interact with companies, particularly online. We acquired the shares as part of a private equity sell down at a 9% discount to the closing price. We view the growth profile and market leading presence of the company as attractive.

Elixirr International

Elixirr is a management consultancy business. Founded during the financial crisis in 2009, it is a challenger to the larger consultancy businesses. We first acquired the shares at IPO in July 2020 since when the shares have more than trebled as the company continues to outperform market expectations. We added to the holding as part of a management sell down where we acquired the shares at a discount. The holding now represents one of our largest.


We maintained cash levels at over 5% as a result of sales and fund inflows. Saietta and Watches of Switzerland were trimmed on strength – both have been every good performers. JD Wetherspoon was trimmed following a sharp rise following the Chancellor’s decision in the Budget to reduce taxes on beers and certain wines. Hollywood Bowl was also trimmed following a strong trading update. Profits were taken in Diversified Energy on exceptional gas price strength.

Cumulative Performance (Total Return %) – October 2021

Fund/Benchmark Name 3M to 31/10/21 6M to 31/10/21 Year to 31/10/21 3 Years to 31/10/21 5 years to 31/10/21 Since Inception (28/05/1997)
IFSL RC Brown UK Primary Opportunities P Acc 3.6 4.2 45.2 29.9 59.3 525.2
Quartile Ranking IA UK All Companies 1 3 1 2 1 1
IA UK All Companies 1.7 4.4 37.2 24.1 38.3 322.2
FTSE All Share 3.5 5.4 35.4 17.6 31.4 316.7

Source: FE: 31/10/21


Discrete Annual Performance (Total Return %) – October 2021

Fund/Benchmark Name Year to 31/10/21 Year to 31/10/2020 Year to 31/10/2019 Year to 31/10/2018 Year to 31/10/2017
IFSL RC Brown UK Primary Opportunities P Acc 45.2 -14.2 4.2 0.0 22.6
Quartile Ranking IA UK All Companies 1 2 3 1 1
IA UK All Companies 37.2 -15.3 6.8 -3.7 15.6
FTSE All Share 35.4 -18.6 6.8 -1.5 13.4

Source: FE: 31/10/21

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.