BlackRock Smaller Companies Trust plc
The UK’s smaller companies’ sector is vibrant and dynamic, an important source of employment and an engine of economic growth. Targeting long-term capital growth, this Trust seeks out the fastest growing, most innovative and exciting companies from the UK small cap universe.
About this investment trust
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
The Company aims to achieve long-term capital growth for shareholders through investment mainly in smaller UK quoted companies.
Why choose it?
We aim to find the ‘hidden gems’ within the small cap universe, investing in high-quality growth companies that are able to shape their own futures regardless of the wider economic environment. As active managers, we believe this area presents us with an attractive hunting ground: these companies are often under-researched, and pricing is inefficient. This gives us great opportunities to generate returns for our clients over the long term.
Suited to…
Investors looking for carefully selected opportunities among the UK’s vibrant small cap sector for long-term capital growth. Investors need to be able to tolerate variation in their capital.
BlackRock Smaller Companies Investment Trust
BRSC FAQs
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The BlackRock Smaller Companies Trust’s seeks to achieve long-term capital growth for investors by predominantly investing in smaller UK companies. It aims to uncover “hidden gems” within the small-cap realm, focusing on high-quality growth companies capable of shaping their own futures irrespective of broader economic conditions. As active managers, the Trust views the small-cap space as attractive for its potential for under-researched opportunities and inefficient pricing, aiming to provide opportunities to generate returns over the long term.
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Roland Arnold has been the manager of BlackRock Smaller Companies Trust since 2018. He is also co-manager of the BlackRock UK Special Situations Fund, a manager of Small and Mid-Cap UK Equity Portfolios and a member of the UK Equity Team.
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Dividends are declared and paid out semi-annually. Interim dividend payments are made in November with the final payment of dividends on ordinary shares being paid in June.
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The smaller companies sector which the BlackRock Smaller Companies Trust invests in is home to numerous market-leading businesses that have historically outperformed larger companies over the long term1. Smaller companies can be more focused, enabling investors to target niche growth areas that may not be as accessible with larger, more diversified companies. They can respond quickly to market changes, and be more entrepreneurial in seizing opportunities. Overall, investing in smaller companies can enhance returns and bring valuable diversification to client portfolios.2
1 Source: AIC – February 2025.
2 Source: BlackRock as at June 2025. -
Smaller companies may be considered to be riskier investments due to factors including greater volatility, limited financial resources, lower market liquidity, concentrated business risk and a limited track record. Smaller companies can experience higher price fluctuations, making them more susceptible to economic downturns and unexpected challenges. Their limited financial resources may pose challenges during adverse market conditions, and lower liquidity can result in larger price swings.
Despite these risks, smaller companies could offer growth opportunities and the BlackRock Smaller Companies Investment Trust actively manages these challenges to potentially capitalise on higher returns while navigating associated risks through thorough research and strategic investment decisions.
Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.
What are the risks?
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Counterparty Risk
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Gearing Risk
Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Liquidity Risk
The Fund's investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.
Smaller Companies
Shares in smaller companies typically trade in less volume and experience greater price variations than larger companies.
Useful information
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Fees & Charges
Annual Expenses as at Date: 28/02/2025
Ongoing Charge (including any Performance Fee): 0.8%
Management Fee Summary: BlackRock receives an annual fee which is calculated based on 0.60% in respect of the first GBP 750m of the Company's total assets less current liabilities, reducing to 0.50% thereafter. There are no performance fee arrangements in place.
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ISIN: GB0006436108
Sedol: 0643610
Bloomberg: BRSC:LN
Reuters: BRSC.L
LSE code: BRSC
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Name of Company: BlackRock Fund Managers Limited
Telephone: 020 7743 3000
Email: cosec@blackrock.com
Website: www.blackrock.com/uk
Correspondence Address: Investor Services
BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL
Name of Registrar: Computershare PLC
Registered Office:
Dundas House
20 Brandon Street
Edinburgh EH3 5PP
Registrar Telephone: +44 (0)370 707 1649
Place of Registration: Scotland
Registered Number: 006176
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Year End: 28 February
Results Announced: October (interim), April/May (final)
AGM: July
Dividends Paid: November (interim), June (final)
Latest company announcements
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
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To receive email alert notifications once an update to the Trust occurs, please sign up and select the updates you would like to receive via The Association of Investment Companies website here. Please be aware by clicking on this link you are leaving BlackRock and entering a third party’s website. As such, BlackRock is not liable for its content.
ESG Integration
The fund noted above does not commit to sustainable criteria nor does it have a sustainable investment objective.
BlackRock considers many investment risks in our processes. In order to seek the best risk-adjusted returns for our clients, we manage material risks and opportunities that could impact portfolios, including financially material Environmental, Social and/or Governance (ESG) data or information, where available. See our Firm Wide ESG Integration Statement for more information on this approach and fund documentation for how these material risks are considered within this product, where applicable.
Fund manager commentary
31 July 2025
Comments from the Portfolio Manager
Please note that the commentary below includes historic information on the Company’s NAV performance and index performance.
The figures shown relate to past performance. Past performance is not a reliable indicator of future results.
During July the Company’s NAV per share rose 1.0% to 1,516.24p on a total return basis, while our benchmark index, the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, returned 0.7%.1
Politics remained front and centre in the UK during July. Tensions over welfare reforms triggered a government U-turn, raising concerns about fiscal headroom. The Office for Budget Responsibility flagged growth risks ahead of the autumn budget, and the Chancellor signalled potential tax hikes to address the widening fiscal gap. Weak retail sales and a second consecutive GDP (Gross Domestic Product) contraction in May heightened expectations for a Bank of England rate cut in August, as the Monetary Policy Committee advocated for faster easing. UK equities benefited from global rotation out of U.S. assets through the month amid tariff tensions and policy risks. The FTSE 100 Index rose +4.3%, outperforming the small and mid-cap market which suffered from ongoing domestic woes.
Oxford Biomedica was the top contributor to performance during the month after also reporting strong H1 25 results and reiterating full-year guidance. The company secured £149 million in new orders in the period, more than doubling last year’s figures. The second largest contributor was Boku, a specialist in localised payment solutions, which raised its full-year guidance following a continued shift away from traditional card-based transactions toward Local Payment Methods (LPMs). This structural change in consumer behaviour has propelled Boku’s total payment volume beyond US$7 billion, underscoring its growing relevance in the digital payments ecosystem. The portfolio also benefited from M&A (mergers and acquisitions) activity, notably through our holding in Alpha Group International, a specialist in FX risk management and alternative banking solutions. Alpha received a recommended all-cash takeover offer from Corpay Inc., a US-listed digital payments firm, valuing the company at £1.8 billion, a 55% premium. The deal highlights the portfolio’s exposure to high-quality, scalable financial technology businesses that are increasingly attractive to global acquirers.
While Alpha was beneficial to relative performance, the extent of M&A in the market more broadly continues to create challenges. This month it was financial services business, Just Group, which received an offer from Brookfield Wealth Solutions for a massive 75% premium. We did not own the shares, which therefore hurt relative performance. Frustratingly Just Group has subsequently issued a weak trading statement that highlights exactly why we had exited our position. The second largest detractor was another share that we do not own, Oxford Nanopore Technologies, which saw its share price jump in response to a solid trading update with revenue growth ahead of expectations. Finally, and in a direct contrast from last month where it was the top contributor on the back of strong results, Paypoint gave back some of its recent share price gains on no specific news.
For the last few months, we have been more constructive on the outlook for the UK market. Rates have been falling, unemployment whilst rising is still at historically low levels, real wage growth continues, and the government has made inroads into reducing regulatory over burden which has the potential to start to lift the country out of the productivity malaise of the last few years. However, we have to acknowledge more recent developments have not been supportive of this stance, with Labour backtracking on a number of initiatives, and the bond market’s reaction to Rachel Reeves’ emotional appearance at Prime Minister’s Questions highlights the fragile nature of government finances. Once again, the predictability of the government is being called into question, once again this will lead to company management pausing on decisions, and once again it will raise the spectre of tax increases at the next budget.
All is not lost however, and whilst Trump’s tariffs will no doubt have significant and far-reaching consequences, the recent signing of several trade deals has settled both bond and equity markets. Once the rules of engagement are known, companies can then begin to plan for the medium to long term. The release of the fiscal break in Germany has the potential to reinvigorate European investment, something that many UK companies will benefit from, and perhaps reminds investors there are profitable opportunities outside of the US equity market.
The pace of M&A shows little signs of slowing, with 30 bids in the first half of the year, highlighting the valuation anomaly that sits within the UK. This is the deepest and longest period of underperformance of UK SMID versus large cap we have seen in over 40 years. Whilst the outlook may still be difficult for many companies, we feel this is more than captured in valuations. With all the uncertainty in the US equity market and investors looking for other places to allocate money, a stabilising and cheap UK market could be a valid and attractive alternative.
We thank shareholders for your ongoing support.
1Source: BlackRock as at 31 July 2025
Unless otherwise stated all data is sourced from BlackRock as at 31 July 2025.
Any opinions, forecasts represent an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research, investment advice or a recommendation.
Risk: Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies.
Portfolio manager biography
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Roland Arnold is manager of BlackRock Smaller Companies Trust plc and a member of the UK Equity Team. Mr Arnold has been co-manager of the BlackRock UK Special Situations Fund since August 2012, and manager of Small & Mid Cap UK Equity Portfolios since 2006. Roland’s service with the firm dates back to 2000, including his years with Merrill Lynch Investment Managers (MLIM), which merged with BlackRock in 2006.
Roland Arnold
Board of directors
All of the Directors are independent of the management company and are members of the Management Engagement Committee. With the exception of the Chairman all Directors are members of the Audit Committee.
Ronald Gould (Chairman) was appointed to the Board in April 2019 and became chairman of the Company in June 2019. He is currently Chairman of Henderson Far East Income Trust plc, Think Alliance Asia and was previously Chairman of Credo Capital Partners AB, Compliance Science Ltd and a Non-Executive Director of the JPMorgan Asian Investment Trust plc. He was also previously Managing Director and Head of the Promontory Financial Group in China, CEO of Chi-X Asia Pacific, Senior Adviser to the UK Financial Services Authority, CEO of investment bank ABG Sundal Collier and Vice Chairman of Barclays Bank asset management activities.
Mark Little (Chairman of the Audit Committee) was appointed to the Board on 1 October 2020. He is a non-executive director and also chairs the audit committees of the Majedie Investment Trust Plc and Securities Trust of Scotland Plc and is a non-executive Director and audit committee chairman designate of the Abrdn Equity Income Trust plc. He was also previously Investment Director at Seven Investment Management and a non-executive director (and audit committee chairman) of Sanditon Investment Trust plc as well as a non-executive director for the start-up business UWI Technology and the charity Winning Scotland Foundation. Mr Little has a wealth of experience in the financial services sector, and began his career as a fund manager with Scottish Widows Investment Management after qualifying as a chartered accountant with Price Waterhouse in 1991. He subsequently worked as Global Head of Automotive Research for Deutsche Bank and joined Barclays Wealth in 2005, where he became Managing Director of Barclays Wealth (Scotland and Northern Ireland).
James Barnes (Chairman of the Nomination and Remuneration Committee) was appointed to the Board on 31 July 2021. He is a Non-Executive Director and is also currently the Chairman of Vestey Holdings, the Horticultural Trades Association, Thirlstane Castle Trust and the Crieff Food Company and was previously a Director and Chairman of Dunedin Smaller Companies Trust plc. Mr Barnes was also previously a Director of Dobbies Garden Centres plc; he was instrumental in growing the business and leading its sale to Tesco in 2007. Mr Barnes has a wealth of experience in the financial services and UK smaller companies sector and began his career in corporate finance and investment banking.
Helen Sinclair (Senior Independent Director) was appointed to the Board on 1 March 2022. She began her career in investment banking and spent nearly eight years at 3i plc focusing on management buy-outs and growth capital investments. She later co-founded Matrix Private Equity (which became Mobeus Equity Partners) in 2000 and subsequently became Managing Director of the company before moving to take on a number of non-executive director roles. She is a non-executive director of WH Ireland Group plc, Shire Income plc and Sherborne Investors (Guernsey) C Limited and Chairman of Octopus Future Generations VCT PLC. Ms Sinclair was previously Chairman and non-executive director of British Smaller Companies VCT and a non-executive director of Mobeus Income & Growth 4 VCT plc and The Income & Growth VCT plc.
Dunke Afe-Morgan was appointed to the Board on 1 January 2024 as a Non-Executive Director. She is an accomplished global marketing executive with extensive experience in raising brand awareness, delivering high-impact portfolio strategies and omni-channel marketing campaigns to drive business growth. She has previously worked with top blue chip multinationals including Unilever, Kimberly Clark and Estee Lauder. Ms Afe is also a Non-Executive Director of CT UK Capital and Income Investment Trust plc.
