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

6th October 2021

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

September: Equity market jitters

September, which has historically often been a difficult month, saw equity markets give up some of the gains made year to date. A combination of the persistent covid delta variant, that is causing lockdowns in many parts of the world, elevated inflation, slowing global growth concerns and supply chain issues, along with raw material price increases, all served up a cocktail that left the market somewhat shaken and stirred. Nevertheless, some form of setback was inevitable given the market strength enjoyed since the positive vaccination results last November. In the UK specifically, the inflation rate hit 3.2%, its highest since 2012, whilst sterling fell to its lowest level in eight months on fears the fuel crisis could exacerbate a slowdown in the economy.

There is a substantial pipeline of companies wanting to come to the market, and existing listed companies wanting to raise equity for growth purposes. As ever, it is our job to invest in those we believe will produce strong, stable returns for our investors, whilst maintaining a well-balanced portfolio across different sectors and market capitalisations. We are excited by a number of the opportunities we are currently evaluating.

We added to our holding in Creo Medical as it raised fresh equity and participated in the IPO of Made Tech.

In September the IFSL RC Brown UK Primary Opportunities Fund returned 0.1% compared with -1.2% for the FTSE All Share and -2.5% for the IA UK All Companies sector. Our lower exposure to the mid cap universe relative to peers, which had been a drag in previous months, reversed sharply, along with a number of our larger holdings performing well in what proved to be a weak market, albeit the UK materially outperformed other major markets.

***Stock in focus***

Kape Technologies

Kape is an internet privacy and security business providing services such as virtual private networks (VPN) to ensure people have privacy when online. We invested in the company in October 2020 as part of a $100m raise to fund a recent acquisition. The company has recently announced a further $350m fund raise to fund the $936m acquisition of Express VPN, a global VPN provider. The combined group will have over 6m subscribers. The shares have more than doubled since purchase in under a year and will become one of our largest holdings following completion of the deal. Unlike many technology companies, it is profitable and modestly valued and we anticipate further gains.


Creo Medical

We added to our holding in this medical device company following a £31m fund raise in order to provide capital for the development of further endoscopy products and allow for future M&A.

Made Tech Group

Made Tech helps public organisations to modernise legacy applications in order to accelerate digital service delivery. This results in major cost and efficiency savings. It works with six of the ten largest spending government departments including the Ministry of Justice, the DVLA and HMRC. With sales doubling last year and forecast to continue growing strongly as the government continues to modernise, we view this an attractive IPO opportunity where funds raised will be used to grow the business further.


Cash levels were raised to over 5% ahead of what we anticipate being a particularly busy few months for primary opportunities. We like to sell on news flow and during periods of market strength. Profits were realised in C&C Group and the holdings in Lords Trading, a recent IPO, and Brickability, trimmed on strength. Underperformers Victoria Plumbing, ActiveOps and Distribution Finance Capital were all sold. Given the remarkable strength in oil & gas companies, with oil hitting a three year high of $80, we trimmed the holdings in BP & Royal Dutch Shell. Many of our peers have sold out of these investments on ESG grounds. We take a more pragmatic view. Clearly the world is moving away from oil & gas consumption but this will take many years and in the meantime, to keep the lights on, there is a need for such commodities. BP and Shell are some of the largest investors in renewable energy as their business models pivot to clean energy. It is our job, as active investors, to ensure they meet the carbon reduction targets that they have set out.

Cumulative Performance (Total Return %) – September 2021

Fund/Benchmark Name 3M to 30/09/2021 6M to 30/09/2021 Year to 30/09/2021 3 Years to 30/09/2021 5 years to 30/09/2021 Since Inception (28/05/1997)
IFSL RC Brown UK Primary Opportunities P Acc 3.0 8.8 40.4 21.0 59.3 519.1
Quartile Ranking IA UK All Companies 2 2 1 2 1 1
IA UK All Companies 2.7 8.5 32.4 15.5 38.5 321.0
FTSE All Share 2.2 8.0 27.9 9.5 29.8 309.3

Source: FE: 30/09/2021


Discrete Annual Performance (Total Return %) – September 2021

Fund/Benchmark Name Year to 30/09/2021 Year to 30/09/2020 Year to 30/09/2019 Year to 30/09/2018 Year to 30/09/2017
IFSL RC Brown UK Primary Opportunities P Acc 40.4 -12.9 -1.1 7.6 22.4
Quartile Ranking IA UK All Companies 1 2 3 1 1
IA UK All Companies 32.4 -12.8 -0.0 5.5 13.7
FTSE All Share 27.9 -16.6 2.7 5.9 11.9

Source: FE: 30/09/2021

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.