UK equities may be out of favour with global asset allocators, but there is one set of investors who are snapping them up at a rate rarely, if ever, seen before.
More and more company management teams are announcing share buybacks. And they are not confined to the FTSE 100 juggernauts. Increasingly, smaller companies too are deploying cash to buy up their own shares.
Last year, 30 companies listed on the FTSE All-Share saw their total number of shares fall by 5per cent or more and this was to a large extent due to buybacks1. In three years, 27 companies have purchased 10per cent or more of their own shares. In 2023, roughly one in eight smaller companies listed in the UK bought back their own shares.
In our own small-cap portfolio, we saw 11 companies engage in share buybacks last year. In 30 years as a small-cap investor, I have never seen this level of buybacks among the UK’s smaller companies.
The key question is, of course,…
