New investment trust launches find a niche

JPMorgan Cazenove and Arbuthnot Securities are brokering the launches of two new investment trusts; one technology-orientated and the other investing in emerging market utilities.

JPM Cazenove is seeking to raise 48.2m for a Guernsey-listed exempt investment company called the T2 Income fund. Managed by American-based T2 Advisers, the objective of the trust is to provide a high income by investing in the debt securities of small to medium-sized companies, primarily located in Britain and Europe. The focus is on technology-related stocks such as software, hardware, internet, media, telecoms and semiconductors, and the fund is expected to achieve a first-year yield of 7.2%.

The capital T2 invests in the underlying companies is expected to be used to finance organic growth, acquisitions, recapitalisations and working capital. So far T2 has entered into non-binding letters of intent to make five investments totalling about 42m.

Elsewhere, last week trading began on a new 75m emerging markets utilities investment trust, which is being brokered by Arbuthnot Securities. The Utilico Emerging Markets Utilities trust, which will trade on both Aim and the Bermuda Stock Exchange, will be managed by the Australian investment adviser Ingot Capital Management.

The trust invests solely in emerging markets sectors such as water, electricity, oil, gas, ports and transport. The portfolio is predominantly focused on Asian, Latin American, emerging European and African markets. However, Ingot also has the opportunity to invest in markets worldwide. The trust has the flexibility to invest in shares, bonds and convertibles, and will also be able to invest in unlisted securities.

Ingot already manages the split-capital Utilico investment trust. Formed out of the reconstruction of the Special Utilities investment trust in August 2003, it invests in utility-related sectors in Britain, continental Europe, North America and Australasia. Only 10% is held in emerging markets.

Meanwhile, the Insight Foundation Property trust has successfully raised 98.7m through the successful offer and placing of 100 million new C-shares. The placing has allowed the trust to increase the portfolio’s exposure to the central London and South East office markets.

l Cover story, page 21