By Jenne Mannion Investors should hold off buying Schroder Ventures International investme...
By Jenne Mannion
Investors should hold off buying Schroder Ventures International investment trust in the short term, however it should be a strong performer over the long term according to Alan Ray, investment trust analyst at Credit Lyonnais Securities Europe.
"There is no long-term beef with SVI, but in the short term I'm cautious about the venture capital market in general," Ray said.
The Schroder Ventures International saw its net asset value fall by 2.57% over the six months to the end of December, but this compared favourably to the 8.4% fall in the FTSE World Index over the same period.
John McLachlan, chairman of SVI, said the decrease in net asset value is primarily attributable to the decrease in the value of the company's quoted portfolio.
The six-month period was marked with a high level of investment activity. In total, £102.6m was invested during the period in 14 new and 15 follow-on investments. This compares with £32m over the same period last year and £162.3m for the 12 months to 30 June.
This means that around 58% of the portfolio is now valued at cost and that more than 83% of investments have been held for three years or less.
McLachlan said with such a high proportion of the portfolio valued at cost, it should provide for future upside in portfolio value.
Tread carefully for now but for those prepared to invest over five to 10 years this company remains a good buy.