Bottom Line: Blast from the past

MUCH opprobrium was heaped on Lord Stevens for his stewardship of Invesco and of Drayton Consolidated Trust in particular. Curious, then, to see that two of the best performers in Drayton's successor trust, the brilliantly successful Second Consolidated, are investments from the Stevens era - the US companies Oak Industries and Mid-States. Lord Stevens even remains chairman of them.

Second Consolidated, now managed by Foreign & Colonial Ventures, has done so well that a cash repayment to shareholders of at least pounds 25m is promised for late March as part of a planned winding down of the portfolio - much of which is made up of small illiquid or unquoted stocks.

Net asset value has risen in 15 months from 155.7p to 187.1p at the end of December, and, more importantly, the discount of the share price to net asset value has fallen by three-quarters from the original 40 per cent.

Poor old Invesco would have seen some of these gains if it had remained in charge, since its US stock picking has proved as good as its UK choices were poor. Second-line and unquoted companies have boomed in value and discounts for venture funds have narrowed sharply. The US investments grew to 64.5 per cent of the portfolio, while the UK assets shrank to 24.2 per cent.

Whether the discount would have narrowed so much with Invesco rather than the confidence-inspiring Foreign & Colonial in charge is another matter, since the old managers would no doubt have gone on stock picking rather than winding the trust down. Promises of a cash payout obviously lower the discount. By this week, pounds 29.7m had been realised.

Nevertheless, no other venture fund's share price has matched this increase of more than 80 per cent, so Foreign & Colonial has clearly added value.