North Atlantic Smaller notes UK takeover flurry as net asset value up

North Atlantic Smaller Cos Investment Trust PLC on Monday highlighted the takeover frenzy surrounding London-listed companies as fund managers pivot towards large international businesses.

The investor in smaller companies mainly "based in countries bordering the North Atlantic Ocean" reported an improvement in its net asset value despite a period of "considerable volatility in equity markets".

NAV per share at its July 31 half-year-end was 598.1 pence, up 7.7% from 555.4p at January 31.

North Atlantic Smaller said total return to shareholders was 9%, "very marginally behind" the sterling-adjusted S&P composite index.

The company said that, consistent with prior years, it won't declare a dividend until the outcome of the year becomes clearer.

"Once again, technology performed well and major oil companies in particular out performed. Sterling fell against the dollar which impacted relative performance as the dollar related assets were now accounting for less than 20% of the portfolio," North Atlantic Smaller said.

The Iran war contributed to "considerable volatility in equity markets over the six months", it added.

Looking ahead, Chief Executive Officer Christopher Mills said: "The UK market continues to suffer from apparently endless redemptions as fund managers pivot towards large international businesses, whilst small cap and mid cap managers who have not been lucky enough to benefit from takeovers suffer from poor performance.

"UK interest rates have continued to rise at the long end and this combined with a plethora of proposed give aways by the new [Prime Minister Andy] Burnham administration does not bode well for government deficits or consumer confidence if they are funded by a further massive round of tax rises."

North Atlantic Smaller shares were 0.5% higher at 402.00 pence each on Monday morning in London.

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