Investment trusts gather £2.3bn in Q1

Investment trusts gathered around £2.3bn inflows in the first quarter of this year despite the closure of a number of large funds, according to QuotedData figures.

Money raised in the first three months of the year were 35 per cent higher compared to £1.7bn raised in the same period last year, but around £2.2bn flew from the market due to the closing of the M&G High Income, New City Energy and Duet Real Estate Finance trusts.

The infrastructure and specialist property sector, in particular, dominated the list of funds raising money.

Of these trusts, HICL Infrastructure’s issue was three times oversubscribed, QuotedData says.

BioPharma Credit was the largest fund IPO so far in 2017 raising $761.9m.

QuotedData research director James Carthew says in the first quarter of the year investors are looking at income from investments with lower than average correlation with equity markets.

He says: “BioPharma Credit, which lends money to healthcare companies backed by royalty payments, was the largest IPO of the first quarter. This is a whole new area for the investment companies sector and a good sign that the sector is still innovating, refreshing itself and keeping itself relevant. It helped the sector expand in a quarter when more equity focused funds such as Alliance and Scottish Investment Trust were shrinking.

“The infrastructure funds investing in PFI type deals proved popular. The money they have raised has, largely, been put to work quite quickly and so they’ll be back for more if they can. Specialist REITs are also in demand. Student accommodation fund, GCP Student Living, has been around for a while but we also saw the launch of two new funds, Impact Healthcare REIT which is investing in care homes, and LXi, which is building a diverse portfolio of long leasehold property.”