Schroders Capital Global Innovation Trust plc - INOV H1 Earnings Call Highlights

Key Points

• NAV per share rose 1.3% to 22.53 pence in the first half, while the share price gained 10.5%, narrowing the discount to NAV to approximately 25%. The trust made no new investments as it continued its managed wind-down.
• Portfolio realizations generated £9.6 million, enabling the planned shareholder tender offer to increase to £28 million from £18 million. Since the wind-down began, the trust has returned or committed to return approximately £66 million through share repurchases and the upcoming tender offer.
• Management said the wind-down could extend beyond 2028 because exits depend on trade sales and IPOs by minority-owned portfolio companies. Life-sciences exits, including Neurona and Memo Therapeutics, supported performance, while the trust fully exited Autolus and revalued Revolut higher.

Schroders Capital Global Innovation Trust plc - INOV LON: INOV reported a 1.3% increase in net asset value per share during the first half of the year as the investment trust continued its managed wind-down strategy, generating cash from portfolio exits and increasing the size of its planned shareholder tender offer.

NAV per share rose to 22.53 pence at the end of June from 22.23 pence at the end of December. The share price increased 10.5% over the same period, narrowing the discount to NAV from more than 30% to about 25%, according to the presentation.

The trust made no new or follow-on investments during the period, consistent with its wind-down approach. Management said the portfolio is being managed for orderly exits rather than forced sales.

Realizations Support Larger Tender Offer

The trust generated £9.6 million in realizations during the first half, including proceeds from Bluewater Bio and Autolus Therapeutics, as well as milestone payments associated with previously exited life-sciences holdings.

Its planned tender offer was increased to £28 million from £18 million, supported by portfolio cash generation and available resources. The trust had £34.3 million in cash and equivalents at the end of June, representing 24% of NAV. Management said the tender offer is expected to leave a reserve for investments and expenses.

Since the wind-down began in the third quarter of 2024, the portfolio has increased in value by 11.8%, while 36% of its starting value has been converted into realizations. The trust started that period with investments valued at just under £137 million, completed £6 million of investments, recorded nearly £17 million in gains and generated £50 million of realizations, leaving a portfolio value of £110 million at the end of the interim period.

The trust has repurchased or canceled £38 million of shares to date. Combined with the planned 2026 tender offer, total shareholder returns since the start of the wind-down are expected to reach £66 million.

Life Sciences Exits Drive Portfolio Performance

Life-sciences investments made a positive contribution to NAV during the period, aided by transactions involving Neurona Therapeutics and Memo Therapeutics. Growth holdings were a moderate detractor, while venture holdings were broadly flat. Public equities made a small negative contribution, principally related to Autolus.

Neurona, a developer of cell therapies for neurological disorders, was acquired by UCB in June for $650 million upfront, with potential additional milestone payments. The trust’s investment was valued at 1.5 times its original cost at the end of the period and could rise to 2.4 times if all milestones are achieved.

Memo Therapeutics’ lead program was acquired by Ipsen in July for a stated share purchase amount of £200 million, with potential additional payments tied to regulatory and sales milestones. The trust had invested in Memo during the fourth quarter of 2023. The holding was valued at 2.6 times the original investment at the end of the second quarter and could rise to about 5.6 times if all milestones are met.

Memo’s remaining assets and employees were transferred to a new company that will remain owned by existing Memo shareholders, including the trust. As a result, the trust expects to retain an interest in the new business after realizing value from the lead-program transaction.

The presentation also noted that Sanofi discontinued a program associated with Kymab, which had been acquired by Sanofi several years earlier. Management said no additional value is expected from the milestone payments tied to that prior Kymab exit.

Autolus Fully Exited; Revolut Revalued Higher

The trust fully exited its remaining public-equity holding, Autolus Therapeutics, during the second and third quarters after reassessing the risk-reward profile following new data. The sale generated £2 million in proceeds, with the full amount intended to support the increased tender offer.

Public-equity exposure had fallen to 1% of the portfolio at the end of June and subsequently declined to zero following the Autolus exit.

Revolut was positively revalued and became the trust’s second-largest holding, close in value to its largest investment, Atom Bank. Management cited Revolut’s reported 2025 performance, including a 30% increase in retail customers to 68 million, revenue of £4.5 million as stated in the presentation, and profit before tax of £1.7 billion. The company also recently received conditional approval in the U.S., according to the presentation.

Elsewhere, Back Market and AgroStar were marked down, reflecting weaker market comparables as well as company-specific supply-chain and other factors.

Wind-Down May Extend Beyond 2028

Management said it is making progress toward returning capital while seeking to maximize value from remaining holdings. However, it cautioned that the process is complicated by the trust’s minority-equity positions, which limit its control over the timing of exits.

Future realizations may depend on trade sales and initial public offerings initiated by underlying portfolio companies. Based on current market conditions and the remaining portfolio, management said it does not expect material realizations before 2028.

The board expects to make further capital distributions through tender offers or other mechanisms as additional exits are completed. Until then, proceeds from portfolio realizations are expected to be held in cash pending future distributions to shareholders.

About Schroders Capital Global Innovation Trust plc - INOV (LON:INOV)

Schroder UK Public Private Trust plc specializes in investments in startups, midsize, middle market and large stage, early stage and mature stage investments. The fund primarily invests in the healthcare, financials, industrials, technology, consumer goods, telecommunications, basic materials, and biotechnology sector. It seeks to invest in quoted and unquoted companies. It primarily invests in companies incorporated in the United Kingdom or traded on a London Stock Exchange market but can invest in Europe, United States and Asia other countries.

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