September was a gradually depressive month for the UK’s smaller cap indices.

What started rather buoyantly, swiftly reverted and the FTSE Small Cap ex ITs ended the month -2.9%, the FTSE 250 -4.4% in comparison to their big brother index the FTSE 100, which ended the month -0.5%.

The last quarter has been a relatively busy period for the portfolio. We added to our positions in Fever-Tree and Trustpilot in August. Trustpilot announced their first half-year results as a publically-listed company and lifted their outlook despite a slightly widened pre-tax loss in the first half of their financial year. We remain confident in the business despite overheads growing, as revenues rose 31% on the previous year. Management has now guided towards mid 20s revenue growth and the platform now has over 145 million peer-to-peer reviews on its website and is consolidating its position as number one in its field.

In September, we added to our position in videogames developer Frontier Developments, the studio behind Jurassic World Evolution and Planet Coaster. The UK is a market-leader in video games development with some of the greatest titles and characters coming from these shores; from Tomb Raider in Derby to Grand Theft Auto from Edinburgh. Nowadays, Frontier is at the forefront of this charge and, over the summer, reported a rise in profit and revenue for its financial year despite not releasing a major new game, leading to a confident outlook for growth over the next two years. The pipeline including the new Warhammer 40,000 game and the first official Formula One management game. We trimmed our position in big box distribution centre manager Tritax Eurobox to fund these purchases.

Finally, we took part in the placing of City of London broker, Peel Hunt. In the glut of 2021 IPOs, we have followed many, but only taken part in two: Trustpilot and Peel Hunt. Peel Hunt is a UK focused investment bank operating in the small and mid-cap space. What drew us to Peel Hunt was their even revenue split between execution, research and investment banking in comparison to their peers. They have developed a market-leading, automated trading platform which executes close to half of all retail trades in the market and we believe are well positioned to benefit from the bounce back in UK markets.

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