During a quarter of generally favourable markets for UK smaller companies, we were happy to keep portfolio activity to a minimum and to let the steady economic recovery that we are seeing work its magic.

All of our portfolio companies have reported results in 2021 and the tone is overwhelmingly optimistic. To cherry-pick examples from across a few sectors: house builder Bellway reported that housing reservations are up +51% on 2020 and are essentially back to pre-COVID levels; consumer review platform Trustpilot grew revenue +31% and are on track to exceed their IPO guidance by a healthy margin; and pub company Young’s managed to get sales back to 85% of 2019 levels in the first few months of the year when people were only allowed to use their pub gardens. Of course, we have not seen the end of COVID-19, but the economy has adapted and we are optimistic for continued good news ahead.

After a strong 2020, the technology sector has had a rare period of underperformance and we took this opportunity to add two new names to the Fund. The first was Kainos, the digital services provider to much of the UK civil service and NHS. If you have recently updated your driving license/passport or booked a GP appointment online, then chances are that this will have been using a Kainos-enabled platform. Kainos is a fast growing business that we believe has a bright future. The second was Frontier Developments, who develop games such as Jurassic World Evolution and the upcoming Warhammer: Chaos Gate. Love it or hate it, gaming is a huge growth market, and Frontier give the Fund exposure here, in addition to what we already have through Keywords Studios.

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