Circ re. Proposed Change of Investment Policy
29 July 2025
Schroder British Opportunities Trust plc
("SBO" or the "Company")
Proposed Change of Investment Policy and Notice of General Meeting
The Board of the Company (the "Board") today announces certain proposals (the "Proposals") regarding (i) a proposed refocusing of the investment objective and policy of the Company; and (ii) a proposal to change the Company's articles of association to bring forward the date on which Shareholders will be given an opportunity to vote on the Company's continuation from early 2028 to early 2027. Accordingly, a circular will be sent to Shareholders today (the "Circular") containing further details of the Proposals and convening a General Meeting at which Shareholders will be asked to consider and, if thought fit, approve the Proposals.
The Circular and Appendix to this announcement contains further detail on the Proposals.
The proposed amendments to the Company's investment policy are deemed to be a material change to the Company's investment policy, requiring the approval of shareholders pursuant to 11.4.14(R) of the UK Listing Rules, which will be obtained if the ordinary resolution to be proposed at the General Meeting ("Resolution 1") is passed.
Resolution 1 is important to the Company and the Board regards the refocusing of the Company's investment policy to be the best strategic option for Shareholders.
Resolution 2 (a special resolution) pertains to proposed changes to the articles of association to enable the Weighted Voting Provisions (as defined in the Appendix to this announcement) to apply to the Shareholder resolution facilitating a managed wind-down process to maximise the realisation of the Company's assets on a winding-up, if proposed in 2027 in accordance with the New Articles.
The Board recommends that every Shareholder votes in favour of the Resolutions, as the Directors intend to do in respect of their own holdings.
The General Meeting will be held at 1:30 p.m. on 9 September 2025 at 1 London Wall Place, London, EC2Y 5AU. The Circular will be mailed to shareholders or otherwise made available today, together with a Form of Proxy.
The Circular, together with a document showing all of the proposed changes to the Existing Articles to form the New Articles, has been published on the Company's website, www.schroders.com/SBOT is available to view and download on the Company's website at www.schroders.com/sbo. Shareholders who require a Form of Proxy should contact the Company's Registrars at: Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.
A copy of the Circular and Notice of General Meeting will be submitted to the FCA and will be available for inspection from the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Defined terms used in this announcement shall, unless the context requires otherwise, have the meanings ascribed to them in the Circular.
Enquiries:
Schroder Investment Management Limited 020 7658 6000
Katherine Fyfe (Company Secretarial)
Charlotte Banks (PR)
Peel Hunt LLP (Broker) 020 7418 8900
Luke Simpson
Liz Yong
Huw Jeremy
LEI: 5493003UY8LIHFW6HM02
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.
About Schroder British Opportunities Trust plc 'SBO'
SBO invests in a diversified portfolio of UK-focussed public and private equity companies with long-term growth prospects.
Further information on the Company is available at www.schroders.com/sbo
APPENDIX
Dear Shareholder,
Proposed New Investment Policy and New Articles
1. Introduction
Further to the Company's announcement dated 17 March 2025, I am writing to you with details of certain proposals (the "Proposals") regarding (i) a proposed refocusing of the investment objective and policy of the Company; and (ii) a proposal to change the Company's articles of association to bring forward the date on which Shareholders will be given an opportunity to vote on the Company's continuation from early 2028 to early 2027. As has always been the Board's intention, Shareholders will be consulted ahead of the 2027 vote being put to Shareholders and alternative proposals put forward if appropriate. We are also taking the opportunity to clarify the action to be taken in the event that Shareholders vote not to continue at that time.
The proposed changes to the articles of association enable the Weighted Voting Provisions (as defined below) to apply to the Shareholder resolution facilitating a managed wind-down process to maximise the realisation of the Company's assets on a winding-up, if proposed in 2027 in accordance with the New Articles.
The purpose of the Circular is to set out the background to and reasons for the Proposals and why the Board unanimously recommends that you vote in favour of the Resolutions to be proposed at the General Meeting to be held at 1:30 p.m. on 9 September 2025, notice of which is set out at the end of the Circular.
2. The Proposals
New investment objective and investment policy
Since IPO, the performance of the Company's portfolio has registered a net asset value ("NAV") total return of 14.9 per cent.[1]. The Board recognises however that, since IPO, much of the positive performance of the Company's portfolio has come from its minority equity investments in private companies, which have delivered a return of 1.5x the original investment[2]. Whilst facing difficult market conditions, the Company's public equity investments have detracted from the overall NAV performance, and it is the view of both the Investment Manager and the Board that the portion of the portfolio invested in private companies offers a better opportunity for shareholder returns in the current environment. As such, and following discussions with Shareholders, the Board is proposing to change the Company's investment objective and investment policy such that they are focused entirely on minority investments in private companies. At the same time as amending the investment policy to invest entirely in minority investments in private companies, the Company is also seeking to remove the restriction on the minimum number of holdings that the Company must have at any one time (currently described as typically 30-50 holdings). Alongside removing this restriction, the Company is proposing to limit the proportion of its portfolio represented by any one investee company to 15 per cent. of NAV at the time of investment (rather than the existing 10 per cent. limit). Together these proposed changes are presented in the New Investment Policy below. The Board considers that the proposed changes will continue to allow the Company to retain sufficient diversification of risk in the Company's investments.
As this change to the investment policy is material, the Board is seeking Shareholder approval for it. If the New Investment Policy is approved by Shareholders, it is expected the Company will be fully deployed in minority investments in private companies by the end of 2026.
For your reference, the Company's existing investment policy (which includes its investment objective) is set out in Part 2 of the Circular, together with a comparison showing the proposed changes.
The Board is proposing that the full text of the New Investment Policy be as follows:
"Investment Objective
The Company's investment objective is to deliver long-term total returns throughout the life of the Company by investing in a diversified portfolio of private equity investments in predominantly UK Companies.
"UK Companies" means companies which are incorporated, headquartered or have their principal business activities in the United Kingdom, and companies headquartered outside the United Kingdom which derive, or are expected to derive, a significant proportion of their revenues or profits from the United Kingdom.
Investment Policy
The Company will invest in a diversified portfolio of private equity investments consisting predominantly of UK Companies which the Company's investment manager (the "Investment Manager") believes have strong long-term growth prospects.
"Private equity investments" mean any investments in any of the following categories (a), (b), (c) and (d) below (although it is envisaged that the Company will predominantly focus on those of an equity and/or quasi-equity nature as set out under categories (a) and (b) below):
(a) shares in companies and other securities/units/interests equivalent to shares in companies, partnerships (including limited partnership interests) or other entities, which, in each case, are not listed or quoted at the time of investment;
(b) securities, derivatives or other instruments giving the right to acquire or sell any of the shares/securities/units/interests referred to in (a) above, including without limitation warrants, options, futures, contingent value rights, convertible bonds, convertible loan notes, convertible loan stocks or convertible preferred equity;
(c) preference shares issued by an issuer referred to in (a) above; and
(d) debt-based investments not otherwise covered above, including loan stock, payment-in-kind instruments and shareholder loans.
It is anticipated that the Company's portfolio will typically consist of companies with an equity value between approximately £50 million and £2 billion at the time of initial investment.
Investment restrictions
The Company will invest and manage its assets with the object of spreading risk through the following investment restrictions:
· no more than 15 per cent. of net asset value ("NAV") may be invested in any investee company;
· no more than 20 per cent. of NAV may be invested in investee companies which are not UK Companies;
· the Company may not take a controlling stake in any investee company, whether directly or indirectly;
· the Company may own no more than 20 per cent. of the enterprise value of any investee company; and
· the Company will not invest more than 10 per cent. in aggregate of gross assets in other listed closed-ended investment funds, except that this restriction shall not apply to investments in listed closed-ended investment funds which themselves have stated investment policies to invest no more than 15 per cent. of their gross assets in other listed closed-ended investment funds. Additionally, in any event, the Company will itself not invest more than 15 per cent. of its gross assets in other investment companies or investment trusts which are listed on the Official List of the Financial Conduct Authority.
Each of the above restrictions will be calculated at the time of commitment. Where the Company makes investments through one or more special purpose vehicles, owned in whole or in part by the Company or one of its affiliates (being an affiliate of, or person affiliated with, the Company, including a person that directly, or indirectly through one or more intermediate holding companies, controls or is controlled by, or is under common control with, the Company), the investment restrictions will be applied on a look-through basis.
Where the calculation of an investment restriction requires an analysis of underlying investments held by a fund in which the Company is invested, such calculation will be based on the information reasonably available to the Investment Manager at the relevant time.
The Company will not be required to dispose of any investment or to rebalance the portfolio as a result of a change in the respective valuations of its assets. However, the Investment Manager will regularly monitor the Company's portfolio and make adjustments from time to time in light of the above restrictions.
Borrowing policy
The Company may, from time to time, use borrowings for investment and efficient portfolio management purposes. Gearing will not exceed 10 per cent. of NAV, calculated at the time of drawdown of the relevant borrowing, except that there will be no re-calculation where a facility is renewed, varied or replaced, and that there will be no re-calculation at the time of a subsequent drawdown under the same facility, provided that the absolute amount of borrowing is not increased at the time of any subsequent renewal, variation, replacement or subsequent drawdown.
Hedging and derivatives
Derivatives may be used for investment purposes, efficient portfolio management or for currency hedging purposes, although it is not expected that a material proportion of the Company's investments will be denominated in currencies other than pounds sterling and any such currency exposure will not normally be hedged.
Where derivatives are used for investment purposes, the Company does not intend to increase the Company's gearing in excess of the limits set out in the borrowing policy above, and any restrictions set out in the investment policy shall apply equally to exposure through derivatives.
Cash management
The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds ("Cash and Cash Equivalents").
There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant cash position instead of being fully or near fully invested. Cash and Cash Equivalents will be held with approved counterparties and in line with prudent cash management guidelines agreed between the board of directors of the Company (the "Board"), the alternative investment fund manager of the Company (the "AIFM") and the Investment Manager. For the avoidance of doubt, the restrictions set out above in relation to investing in listed closed ended investment funds do not apply to money market type funds.
Changes to the investment policy
No material change will be made to the investment policy without the approval of the Company's shareholders by ordinary resolution. Non-material changes to the investment policy may be approved by the Board.
In the event of a breach of the investment policy set out above or the investment and gearing restrictions set out therein, the AIFM shall inform the Board without delay, and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service".
2027 Managed Wind-Down Resolution and New Articles
As disclosed in the Company's IPO prospectus, unless alternative proposals are put forward to and approved by Shareholders at an earlier date, the Existing Articles require the Board to put forward, at a general meeting of the Company to be held in the year 2028 but in any event no later than 31 May 2028, a Resolution requiring the Company be wound up voluntarily (a "Winding-Up Resolution"). The concept this sought to achieve was to give the Company a fixed life. The Existing Articles provide that voting on the Winding-Up Resolution in 2028 will be enhanced such that, provided any single vote is cast in favour, the Winding-Up Resolution will be passed (the "Weighted Voting Provisions"). As a result, the Company is regarded as having a fixed life.
Contingent on the adoption of the New Investment Policy, the Board is proposing to bring forward proposals to allow Shareholders to vote, in the first quarter of 2027, on the continuation of the Company with the same voting power as that provided for the 2028 resolution and to amend the process for a cessation by providing for a managed wind-down process (the "Managed Wind-Down Resolution"). These proposals will take the form of a Shareholder resolution, which, if passed, will support the more efficient disposal of assets and returns of capital to Shareholders. It is proposed that the Managed Wind-Down Resolution be made subject to the Weighted Voting Provisions which currently apply only to a Winding Up Resolution in 2028. Following the conclusion of the managed wind-down process, the necessary resolutions will be proposed in order to place the Company into voluntary liquidation.
Shareholder consultation
If the New Articles are adopted, ahead of the date on which the Managed Wind-Down Resolution is to be proposed under the New Articles, the Directors intend to consult with Shareholders, the Investment Manager and the Company's financial advisers (having considered the Company's financial position and prospects at the time), with a view to putting forward to Shareholders alternative proposal(s) as to the future of the Company.
In the event that no alternative proposals are put forward to Shareholders, or that any proposals which have been put forward fail to be approved by Shareholders, a Managed Wind-Down Resolution will be proposed in early 2027 in accordance with the New Articles, if adopted.
A document showing all of the proposed changes to the Existing Articles to form the New Articles has been published on the Company's website, www.schroders.com/SBO. Shareholders should refer specifically to articles 193.1 and 193.2, which contain the only proposed substantive amendments to the Existing Articles.
Investment Management Agreement amendments
The Company and the Investment Manager have agreed immaterial amendments to the terms of the performance fee payable to the Investment Manager, as set out in the Investment Management Agreement. The amendments will not result in any increase in the amount of performance fee payable to the Investment Manager from time to time compared to the existing Investment Management Agreement. The amendments are designed to reflect that, following the redeployment of the Company's public equity investment assets after the adoption of the New Investment Policy, the Company's portfolio will no longer contain any public equity investments. Shareholders should refer to page 42 of the Company's annual report and accounts for the year ended 31 March 2025, available on the Company's website at www.schroders.com/SBO, for a description of the amendments.
3. Benefits of the Proposals
The Board believes that the Proposals offer the following key benefits to Shareholders:
· Positive performance in the Company's portfolio since IPO has been primarily driven by private equity investments, which have yielded a return of 1.5 times the original investment. This performance has resulted in a fair value gain of £20.9 million in the period since inception in December 2020 up until 31 March 2025.
· The Company's public equity investments have encountered difficult market conditions and have detracted from the overall performance of the portfolio. As such, it is expected that that a portfolio comprised of minority private equity investments in predominantly UK companies offers a better opportunity for Shareholder returns in the current environment.
· The private equity team has developed a strong pipeline of opportunities within the UK private investment market and the managers continue to see interesting deal flow in their core sectors.
· Bringing forward a Managed Wind-Down Resolution in early 2027 will allow Shareholders, at the earliest opportunity, to evaluate the benefits of the New Investment Policy, having allowed the Investment Manager to redeploy funds from the public equity investments portfolio, and to determine if the Company should continue in its present form.
4. Risk factors
Shareholders should be aware of the risk factors set out in Part 3 of the Circular.
5. General Meeting
The Proposals are conditional on the approval by Shareholders of the Resolutions to be proposed at the General Meeting which has been convened for 1:30 p.m. on 9 September 2025.
Resolution 1 (relating to the adoption of the New Investment Policy) will be proposed as an ordinary resolution. An ordinary resolution requires a simple majority of votes cast in favour in order for it to be passed.
Resolution 2 (relating to the adoption of the New Articles in order to allow the application of Weighted Voting Provisions to a Managed Wind-Down Resolution in early 2027) will be proposed as a special resolution. A special resolution requires a majority of at least 75 per cent. of votes cast in favour in order for it to be passed. Resolution 2 is conditional on the passing of Resolution 1.
Voting at the General Meeting will be by way of a poll. In accordance with the Existing Articles, all Shareholders present in person or by proxy will upon a poll have one vote in respect of each Share held. In order to ensure that a quorum is present at the General Meeting, it is necessary for two Shareholders entitled to vote to be present, whether in person or by proxy (or, if a corporation, by a representative).
The formal notice convening the General Meeting is set out in the Circular.
6. Action to be taken in respect of the General Meeting
Shareholders will find enclosed with this document a personalised Form of Proxy for use at the General Meeting.
Irrespective of whether you intend to attend the General Meeting in person, Shareholders are asked to complete and return the Form of Proxy, in accordance with the instructions printed thereon, to the Company’s Registrar, Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA so as to be received as soon as possible, and in any event no later than 1.30p.m. on 5 September 2025. Submission of a Form of Proxy will not preclude Shareholders from attending and voting in person at the General Meeting.
Recipients of this document who are the beneficial owners of Shares held through a nominee should follow the instructions provided by their nominee or their professional adviser if no instructions have been provided.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST manual. The CREST manual can be viewed at www.euroclear.com. A CREST message appointing a proxy (a “CREST proxy instruction”) regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction previously given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time for receipt of proxy appointments.
If you are an institutional investor, you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 1.30p.m. on 5 September 2025 in order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them, and they will govern the electronic appointment of your proxy.
7. Consequences of the Proposals not being approved
The Board regards the refocusing of the Company's investment policy to be the best strategic option for Shareholders. However, should Shareholders reject the proposed New Investment Policy, the Board and the Investment Manager will continue to fulfil the existing investment objective and policy and work to identify alternative options for the future of the Company.
In the event that Resolution 1 is passed but Resolution 2 is not passed, then the Company will have adopted the New Investment Policy but will still be required under the Existing Articles to propose a Winding-Up Resolution in 2028 (to which the Weighted Voting Provisions will apply and without the benefit of an orderly managed wind-down). In those circumstances, in order to avoid unwanted pressure to dispose of private assets in advance of the 2028 Winding-Up Resolution, the Board will consult with Shareholders on how this should best be addressed.
8. Documents available for inspection
Copies of the documents listed below may be inspected at the registered office of the Company at 1 London Wall Place, London EC2Y 5AU during usual business hours on any weekday (Saturdays, Sundays and UK public holidays excepted), up to and including the date of the General Meeting and during the General Meeting:
- the Existing Articles, marked to show the proposed changes;
- the New Articles proposed to be adopted at the General Meeting; and
- a copy of the Circular.
9. Recommendation
The Board considers that the Proposals are in the best interests of the Company and its Shareholders as a whole.
Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
The Directors intend to vote in favour, or procure the vote in favour, of the Resolutions at the General Meeting in respect of their own beneficial holdings of Shares which, in aggregate, amount to 93,645 Shares representing approximately 0.13 per cent. of the Company's issued share capital (excluding Shares held in treasury).
Yours faithfully
Justin Ward
Chairman
[1] Morningstar: 2 December 2020 to 15 July 2025. Private Equity Investments valued at 31 December 2024.
[2] Realised and unrealised returns.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 3 hours ago ASOS
- 3 hours ago MJ Gleeson
- 3 hours ago Rolls-Royce Holdings
- 4 hours ago Crest Nicholson Holdings
- 4 hours ago Naked Wines