There were no new entrants to the London Stock Exchange among investment companies in the first half of 2022, though the volatile market conditions did not deter secondary fundraises.
Richard Stone, chief executive of the Association of Investment Companies, said: “Rising inflation, tight labour markets and the war in Ukraine with its knock-on impacts on supply chains and fuel costs have made this a challenging year so far for capital markets.”
Investment companies raised £4bn in secondary finance in the first six months of 2022, on par with pre-pandemic levels but down from the £5.1bn raised in the same part of last year, he said.
Renewable energy infrastructure firms netted a combined £1.2bn, more than any other sector in terms of size, followed by those investing in infrastructure and commercial property.
Demand for infrastructure and property assets was high, as they can help protect portfolios from inflation, the AIC said in a statement.
Real estate investment trust Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) raised the most capital, securing £307mln this year.
International Public Partnerships Ltd (LSE:INPP) and The Renewables Infrastructure Group Limited (LSE:TRIG) locked in £326mln and £277mln respectively. Home Reit and LXi REIT PLC (LSE:LXI) raised £263mln and £250mln each.
“The first half of the year saw healthy fundraising by existing investment companies, at a similar level to 2019,” Stone said.
The big sea-change was in the fees that investment companies charged to shareholders. Fourteen investment companies amended their charges, either lowering management fees, introducing tiered fees or abolishing performance fees, AIC said.
“Fee reductions have continued to be a theme in 2022,” Stone said. “Independent boards are an important benefit of investment companies over other types of fund and negotiating lower fees for shareholders is just one of the ways in which they demonstrate their value.”
Industry assets stood at £265bn at the end of May, down from a record high of £278bn at the end of November 2021, the AIC said.