Investment company 2021 review

Record fundraising for investment companies in 2021 helped propel the industry to its highest ever level of assets under management, data from the Association of Investment Companies reveals.

Far exceeding the previous fundraising record, £15.1 billion of new money was raised for investment companies in 2021, including £3.8 billion in 16 IPOs.

The previous record was set in 2014 when £10.2 billion was raised.

The £11.3 billion raised by existing investment companies in so-called secondary fundraising was also a record, the previous high being £7.4 billion in 2019.

Fundraising was led by investment companies in the Renewable Energy Infrastructure sector which raised £3.4 billion between them, including £874 million in six IPOs. This was followed by the Infrastructure and Growth Capital sectors, which raised totals of £2.1 billion and £2.0 billion respectively.

Industry assets stood at £277.6 billion at the end of November, an all-time high.

2021 was a year of investment company mergers with five deals completed, the same as the number of mergers in the previous five years (between 2016 and 2020 inclusive), and the most mergers in a year since AIC records begin. A sixth merger has been approved by shareholders of Scottish Investment Trust with JPMorgan Global Growth and Income.

Five changes of management group also became effective during the year, with two more announced.

Boards were active in negotiating fee reductions on shareholders’ behalf. A total of 31 investment companies made fee changes to benefit shareholders.

The average investment company generated a share price total return of 15.7% over the 2021 calendar year. The Property – UK Logistics sector performed best over this period with a 51.6% return.

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “It has been an enormously busy year for investment companies, most notably on the fundraising front, with a record £15 billion raised, but also for mergers, management group changes and fee reductions.

“While strong fundraising is a vote of confidence in the investment company structure, especially for investing in less liquid assets such as green infrastructure and growth capital, fee reductions and manager changes are welcome signs of boards exerting their independence to make sure shareholders are getting the best deal.

“The record number of mergers this year suggests that investment company boards are also responding to investor demand for larger, more liquid investment companies that can deliver the benefit of economies of scale to shareholders.”

IPOs

Source: AIC (as at 31/12/21). Closed issues admitted to trading only.

Largest amounts raised by existing investment companies (secondary fundraising)

Source: AIC (as at 31/12/21). Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.

Sectors raising most in 2021

Source: AIC (as at 31/12/21). IPOs and secondary fundraising combined. Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.

Mergers completed in 2021

In addition to the completed mergers below, the merger of Scottish Investment Trust with JPMorgan Global Growth & Income was approved on 9 December, with the latter being the continuing company.  

Source: AIC (as at 31/12/21).

Management group changes

Source: AIC (as at 31/12/21).

-ENDS-

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Notes to editors

1. All fundraising, corporate activity and fee change data is to 31 December 2021.  
2. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 360 members and the industry has total assets of approximately £278 billion.
3. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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