IFSL RC Brown UK Primary Opportunities | Fund Update | June 2026

June: Falling energy risks fuels UK market recovery

The UK market made solid gains over the course of the month, aided by a ceasefire between the US and Iran and an agreed opening of the Strait of Hormuz. Whilst the ceasefire remains brittle and there will inevitably be bumps in the road, a successful outcome will lead to markedly lower energy prices which in turn markedly de-risks the chances of a faltering global economy. Given Europe and much of Asia’s energy prices are materially higher than the US, it represents a shot in the arm for these economies and markets. UK inflation held at 2.8%, lower than expected whilst the Bank of England kept rates at 3.75%. With inflation fears receding, hopes of an interest rate cut, perhaps by year end, will start to grow.

The political situation in the UK became more uncertain with Andy Burnham winning the Makerfield by-election, resulting in Prime Minister Starmer announcing that he will be standing down. Sterling and UK mid and small cap companies, a barometer for UK plc, have been relatively calm thus far on what is likely to be an uncontested position for Prime Minister with Andy Burnham expected to be in Downing Street by mid-July.

The IPO focus was very much in the US, as SpaceX became the largest IPO in history, raising $86bn and achieving a market valuation of $1.77 trillion. With greater certainty returning to European markets, whilst we do not anticipate any major IPOs over the summer period, we are aware of a pipeline of companies that are considering a London listing. We have engaged with a number in time which if successful, may become portfolio constituents.

No new holdings were added to the portfolio. We turned down the opportunity of fund raisings in two FTSE 250 companies, Ceres Power and WH Smith. Both successfully raised £100m. In the case of Ceres Power, whilst we view it as an exciting company, the valuation we view as extreme and loss-making companies, though not without potential, are, in our opinion, naturally harder to value objectively. WH Smith, a company we held until last October, required funds to reduce its debt. Whilst we view it as a potential turn around story, we would have favoured a larger raise to cut debt further. We did however use pockets of weakness in FTSE blue chips to modestly add to our holdings in Vodafone, BT and Prudential.

In June the IFSL RC Brown UK Primary Opportunities fund returned 1.77% compared with 0.69% for the FTSE All Share and 0.52% for the IA UK All Companies sector, all on a total return basis.

***Stock in focus***

Segro is a FTSE 100 warehouse and logistics property company with an exciting portfolio of industrial warehouses and data centre pipeline. This month it received an all share offer by US logistics giant Prologis, valuing the company at 925p. The board has rejected the offer describing it as ‘opportunistically timed’ and ‘falling way short’ of the Company’s true value. We concur, as the shares continue to trade at a discount to net asset value and we continue to hold the shares for now in the event an improved offer surfaces.

Purchases

No new companies were added to the portfolio in the month. We have been working on two prospective fund raises which we anticipate being added to the portfolio in July.

Sales

We sold our long-term holding in Duke Capital, which despite an enviable 10% dividend yield, has struggled for any capital appreciation whatsoever. We reduced the holding in IQE, only purchased last month, crystallising a gain of in excess of 100%. Semi-conductor chip companies have enjoyed meteoric gains and the shares are highly volatile, hence our decision to lock in significant gains. We also took advantage of strength in Barclays, XP Power and Hammerson to trim holdings.

 

Cumulative Performance (Total Return %) – To 30 June 2026

Fund/Benchmark Name	3M	6M	1Y	3Y	5Y	10Y	Since Inception (28/05/1997)
IFSL RC Brown UK Primary Opportunities P Acc	7.6	8.4	18.5	44.0	27.0	119.3	662.9
Quartile Ranking IA UK All Companies	2	1	2	2	3	2	2
IA UK All Companies	7.2	5.2	12.7	38.0	34.1	99.1	449.6
FTSE All Share	4.7	7.2	21.9	53.1	67.9	129.8	572.1

Source: FE: 30/06/2026

Discrete Annual Performance (Total Return%) – To 30 June 2026

Fund/Benchmark Name	Year to 30/06/2026	Year to 30/06/2025	Year to 30/06/2024	Year to 30/06/2023	Year to 30/06/2022
IFSL RC Brown UK Primary Opportunities P Acc	18.5	10.9	9.6	-1.1	-10.9
Quartile Ranking IA UK All Companies	2	2	4	4	3
IA UK All Companies	12.7	8.7	12.6	6.2	-8.5
FTSE All Share	21.9	11.2	13.0	7.9	1.6

Source: FE: 30/06/2026

Please be advised that the past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested.