Schroders has announced a new trust focused on investing in the future growth of British businesses, following the economic instability and challenging market conditions caused by the outbreak of the Covid-19 pandemic.

The Schroder British Opportunities Trust plc (SBOT) will target small and mid-sized UK companies that the global investment manager believes have sustainable business models that would benefit from additional equity to either maximise their growth potential, or to return them to their previous growth trajectory.

It aims to raise £250 million via an initial public offering to fund the public and private equity investment strategy, with the ambition of providing long-term total returns for investors.

The investment team is led by two of Schroders’ senior investors: Rory Bateman, head of Equities and Tim Creed, head of UK and European Private Equity.

The launch follows the return of more stringent social distancing measures and a reversal of the government’s initial push to return workers to their offices during the summer.

The trust will also promote sustainability to investee companies by encouraging the incorporation of the UN Sustainable Development Goals (SDGs) into their business planning, alongside the adoption of best ESG practices and disciplined capital allocation.

Commenting on the potential of the new trust, Mr Bateman believed that the new opportunity would provide investors an opportunity to safeguard the future of British businesses while making substantial returns,

 He explained: “The companies that require funding are often too large to be the focus of government initiatives, but too small to have the necessary impact with banks or credit markets. The current level of UK government debt-driven support is unsustainable and as support comes to an end, we believe many high-quality UK growth businesses will require."