Odyssean IT: Betting on Increased M&A Activity Among UK Equities
The Odyssean investment trust is feeling optimistic about a surge in merger and acquisition activity among UK equities in the coming 18-24 months. They believe overseas firms will take advantage of the low sentiment toward UK equities. The trust, managed by Odyssean Capital, focuses on investing in smaller companies not typically found in the FTSE 250. They steer clear of businesses where mergers are unlikely and those that aren’t attractive to alternative owners.
In their half-year report for the six months ending on September 30, the trust’s board highlighted the historical benefit of merger activity to their net asset value. Since 2018, the trust has seen takeovers of ten portfolio companies, with 70% by trade buyers and 60% by foreign entities. This track record suggests that the trust’s performance tends to improve as a result of strategic mergers.
