Stock markets serve a dual purpose. They provide savers with returns on their investments over time, and they filter capital to the businesses best placed to earn those returns. Historically, it has been returns that have captured most investor attention. Yet today, increasingly, savers also want to make a difference with their money. Delivering follow-on capital to growing companies is a great way of doing this. One of the most satisfying aspects of my job as a fund manager is seeing a small firm grow to be a midsized company, knowing the role our investors’ money has played in that transformation. Between us, we can help companies create more jobs, make bigger profits and — hopefully — pay more taxes.
Smaller companies in the early stages of growth often have very low revenues and need capital to take advantage of orders when they come. An example of this is Surface Transforms, which manufactures next-generation brakes for cars. It originally raised money to prove the effectiveness of its products to auto manufacturers. More recently it has begun winning orders from well-known electric vehicle manufacturers. In February 2021 it raised nearly £18mn to build capacity to help service those orders.
Surface Transforms plc (LON:SCE) are experts in the development and production of carbon-ceramic materials and the UK’s only manufacturer of carbon-ceramic brakes for automotive use.
