Results round-up: Syncona investment trust

The trust, a member of interactive investor’s ACE 40 rated list of ethical investments, has reported its latest half-yearly results. 

Syncona (LSE:SYNC) investment trust, which invests in life science companies, reported a decline in net asset value of 11.4% for the first six months of its financial year – from the end of March to the end of September.

Over this period, the trust reported that its net assets sat at £1.15 billion, down from £1.3 billion at the end of March 2021.

Figures from FE Analytics show that over this period its share price total return was a loss of 33.6%, suffering from its high premium notably declining.

The decline, the report notes, was driven predominantly by the decline in the share price of two of the trust’s listed holdings, Freeline Therapeutics Holdings (NASDAQ:FRLN) and Achilles Therapeutics (NASDAQ:ACHL). Freeline’s poor performance is put down to “operational challenges” owing to the Covid-19 pandemic. Syncona says these concerns have now been addressed.

Achilles’ share price decline was driven by “market sentiment towards cell and gene therapies”. Syncona says that it believes the business is performing well and in line with expectations.

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The trust’s strategy is to establish, build and fund companies to turn exceptional science into a dynamic portfolio of global leaders in life sciences. The aim is for the companies to deliver their product to market. The trust has a long-term target of owning between 15 and 20 companies. It currently has 10.

Martin Murphy, chief executive of Syncona Investment Management Limited, said: “While we are disappointed by the decline in NAV during the period, we are continuing to build a diverse portfolio across the development cycle and therapeutic areas and remain confident in our companies' potential. The substantial capital that a number of our companies have accessed so far this year validate the significant opportunity ahead for them.”

The trust also said that it planned to deploy another £100 million to £175 million into both existing companies and new opportunities this year.

Murphy said: “With clinical data the key driver of value and risk for Syncona, we believe our companies are well positioned and on track to further validate our model and strategy in the next 12 months with the potential for a rich seam of data.”

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The trust is a member of interactive investor’s ACE 40 rated list of ethical investments. It was placed under formal review in the summer due to the volatility of its share price, but it kept its place in the list.

Dzmitry Lipski, head of funds research at interactive investor, notes: “We remain positive on the trust outlook and see it as a strong choice for adventurous investors prepared to tolerate high volatility in the short term, but potentially reap rewards over the longer term.

“Given its high portfolio concentration, exposure to unquoted companies and absence of a formal premium/discount control mechanism, the trust should form only a small, satellite holding in a well-diversified portfolio. This trust has always been classed as an ‘Adventurous’ ACE 40 option, and will very much continue to be so.”