Sturgeon Ventures and RoboCap launch robotics funds

The RoboCap Automation and Robotics Fund will invest in the ‘next industrial revolution’.

One of the world’s first pure play robotics funds has been launched by regulatory incubator Sturgeon Ventures and investment adviser RoboCap.

The RoboCap UCITS Fund (the ‘Fund’) will 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 and former CIO of Swiss Asset Manager Huet & Cie BV, commented: “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.”

Robotics and automation stocks have performed three to six times better than general equity indices with over 17% internal rate of return over the last 10 years.¹ The market for robotics and automation is estimated to reach over US$ 10 trillion by 2025.²

Seonaid Mackenzie, Managing Partner at Sturgeon, commented: “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 Jonathan as the designated portfolio manager within Sturgeon and RoboCap, as an appointed representative of Sturgeon, is the adviser.

The Fund is being offered to high net worth investors, family offices and institutions in the UK, Europe and abroad.

RoboCap has also become the 100th appointed representative of Sturgeon Ventures since it started to offer this service, with registration by the FCA being granted in less than 24 hours after submission, which is a record for the regulatory incubator. Sturgeon introduced the ‘wholesale appointed representative’ model to the London start-up community. As the pioneer of ‘regulatory incubation’, it coined the phrase in 2001.

1 Source: ROBO Global (ROBOTR Index, +788% from 1-Mar-03 to 18-Dec-15)

2 Source: McKinsey, Disruptive Technologies: Advances that will transform life, business and the global economy, 2013