New investment trusts raised £3 billion in the first seven months of 2008, according to the latest monthly report from Wins Investment Trusts. Issuance showed resilience in June and July, but the figure was well below the £8.4 billion raised in the same period in 2007.
Wins blames the downturn on the decline in issuance for Alternative Investment Market-listed property funds. Just £175m has been raised in the sector so far this year, including £117m for the Terra Catalyst property recovery fund. The sector raised £1.8 billion between January and July 2007.
But demand for hedge funds remains strong, and BlueCrest All Blue and KGR Absolute Return raised £97.2m and £15m respectively, with C share issues. The boards of Absolute Return Trust and FRM Credit Alpha are considering similar moves.
Performance for investment trusts as a whole remains strong, with funds falling less than the FTSE All-Share in the year-to-date. “The long-term factor is the greater use of discount controls,” says Simon Elliott, head of research at Wins. “It gives the market a degree of confidence.”