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Home Breaking News Warren Buffett-inspired firm pulls investment trust IPO

Warren Buffett-inspired firm pulls investment trust IPO

by LLB Editor
26th Oct 20 10:48 am

The Buffettology Smaller Companies IPO has been pulled after failing to raise the £100 million minimum required to float.

This follows Tellworth British Recovery and Growth trust pulling its IPO last month.

Laith Khalaf, financial analyst at AJ Bell: ‘The Buffett name and the excellent performance record of Sanford DeLand simply hasn’t put enough bums on seats to get its UK smaller companies launch off the ground. Sentiment towards the UK market is at a low ebb and a resurgence of virus cases has further undermined confidence.

“Smaller companies tend to beat their big blue chip rivals over the long term, but it’s understandable investors see them as being at the sharp end of any impending economic trauma. The Buffettology focus on quality companies should have provided some downside protection on that front, but that’s academic now.

“Disappointed investors who want exposure to this area could consider the Standard Life UK Smaller Companies trust, which is trading on an 8% discount, or indeed they could invest in the existing Sanford De Land UK Buffettology fund which has a healthy slug of small caps in its portfolio.

“With Tellworth and Buffettology IPOs now scuppered, it’s two down and one to go. We’re still awaiting a prospectus from the Schroder British Opportunities trust which has also announced its intention to float. Schroders has the benefit of a bigger distribution network than the boutique operators Tellworth and Sanford DeLand, but it looks like it’s facing an uphill battle to pull money in, and the failure of a second IPO will no doubt give Schroders pause for thought.”

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