Odyssean Investment Trust [LON:OIT] reported a 2.5 per cent rise in net asset value (NAV) per share in the third quarter of 2025, slightly trailing its comparator index, which gained 2.9 per cent over the same period. Shares in the UK small-cap specialist ended the quarter trading at a 5.9 per cent discount to its NAV of 167.3p.
While quarterly performance was muted, the trust’s longer-term record remains striking. Since its inception in May 2018, OIT has generated a NAV total return of 70.2 per cent, equivalent to an annualised gain of 7.4 per cent — far exceeding the comparator index’s 22.1 per cent total return and 2.7 per cent annualised performance.
Managed by veteran small-cap investor Stuart Widdowson, the trust has delivered consistent results through a strategy refined over 15 years, achieving an average annualised return of 15.1 per cent net of all fees. Notably, this performance has been achieved without the use of derivatives or gearing, underscoring the disciplined, fundamentals-driven nature of its approach.
A “perfectly imperfect” market
OIT characterises the UK small-cap segment as “imperfect — but a perfect place to make money” for those with the skill and patience to exploit inefficiencies. Management believes UK equities remain deeply undervalued, both in absolute terms and compared with international peers, creating fertile ground for long-term investors.
The trust argues that sentiment toward smaller companies is beginning to turn, with early signs of earnings recovery and increased merger and acquisition activity suggesting an inflection point for the asset class.
Although listed in London, OIT’s portfolio is internationally diversified: only around 21 per cent of revenues come from the UK, significantly less than the FTSE 100 or FTSE 250 indices. This global exposure, management says, mitigates domestic macroeconomic risks while preserving access to mispriced UK-listed opportunities.
With UK small-caps still trading at historically low valuations, Widdowson said the trust’s holdings offer “significant upside potential” through both operational improvement and potential corporate activity. OIT’s investment model — centred on deep research, constructive engagement, and valuation discipline — remains its key differentiator.
Elementis: engagement in action
One example is Elementis LON:ELM, the specialty chemicals company in which OIT first invested in 2020. The trust’s active engagement has helped drive substantial operational change, including the sale of two non-core divisions, deleveraging, and around £30mn in cost savings. Board and management changes have further strengthened the company’s leadership.
OIT sees this as only the first phase of value creation. A new chief executive, appointed earlier this year, has already outlined a further £10mn in savings and is pursuing initiatives to position the group for above-trend earnings growth as volumes recover.
Genus: deep research, high conviction
Another core holding, Genus LON:GNS, a global leader in animal genetics, demonstrates OIT’s intensive research-led process. The trust devoted roughly 60 man-hours of due diligence before taking a position, concluding that its entry price represented a 40–50 per cent discount to private market valuations.
OIT’s thesis centred on improving margins in Genus’s bovine division, which contributes half of group revenue but had been under-earning. Third-quarter results validated that view, with strong full-year performance, £9mn in additional cost cuts, and a £167mn sale of its China joint venture — a move expected to reduce net debt to EBITDA below 1x.
Despite subdued near-term returns, OIT believes its blend of patience, active stewardship and disciplined valuation leaves it well placed to benefit from a nascent recovery in UK small caps, an asset class it continues to see as fundamentally mispriced and ripe for active investors.
