Incubator Sturgeon Ventures and investment adviser RoboCap have launched a pure play robotics fund, The RoboCap UCITS Fund.
The firms behind the fund say that it is designed to give investors the opportunity to take part in the industrial revolution being driven by the advent of robotics and automation technology; from 3D printers in manufacturing to high precision surgical robots, fast-developing companies are emerging in this new sector with strong sales and earnings growth.
Jonathan Cohen, Managing Partner, RoboCap, says: “Robotics and automation are creating disruptive changes in every single industry. But we are now at an inflexion point because the cost and performance of robots and the average wages in manufacturing are now converging.
“The technology is improving daily so now is the time to invest yet there are few vehicles that enable investors to benefit from the sector. But as interest grows, there will be a need for specialist advisers giving access to future industry leaders. Our aim is to become the leading investor in robotics and automation listed stocks, delivering the best risk-adjusted returns for investors.”
The firm reports that robotics and automation stocks have performed three to six times better than general equity indices with over 17 per cent internal rate of return over the last 10 years. The market for robotics and automation is estimated to reach over USD10 trillion by 2025.
Seonaid Mackenzie, Managing Partner at Sturgeon, says: “Many investors are vexed as to where they can achieve returns in markets that seem to be overstretched around the world. But alpha is potentially achievable if investors focus on the right themes. We have certainly seen investors increasingly adopt a thematic approach in their search for alpha.”
RoboCap believes it is only the second equity fund specialising in listed robotics and automation companies. It is still a niche market because it is too small to be attractive to large asset managers for now and the technological evolution and new market opportunities and risks require specialist expertise. The Advisory Board will include some of the world’s experts in robotics.
The Fund will target double-digit annual returns by investing in listed companies mainly in the US, Japan and Western Europe. The focus will be on pure play investments but companies benefiting from the theme will also be considered. The Fund will focus on just 22-30 long positions with an average holding period of approximately 12 months.
The Fund, which is RoboCap’s first product, is being launched as a UCITS sub-fund of the ML Capital platform overseen by Sturgeon Ventures. Sturgeon is the portfolio manager, with Cohen as the designated portfolio manager within Sturgeon and RoboCap, as an appointed representative of Sturgeon, is the adviser.
