Gross proceeds raised by initial public offerings (IPO) in closed-ended funds is set to exceed £1.5 billion in 2010, almost doubling the £785m made in 2009, according to Wins Investment Trusts.
Wins says IPOs have raised £1.2 billion in the year to date, but this is set to be boosted by the £270m raised by the John Laing Infrastructure fund last week.
Meanwhile, two credit funds are set to float later this year, alongside BlackRock Frontiers, a frontiers market fund that will be managed by Sam Vecht, who also manages BlackRock’s Eastern European trust.
James Brown, an analyst at Wins, says: “So far this year, we estimate that £2.87 billion has been raised across the sector including £1.15 billion through 12 IPOs.
“This is ahead of the total at a comparable point last year when £2.38 billion had been raised, although much of this was through distressed rights issues with only two IPOs.”
The largest IPO of the year was the Fidelity China Special Situations trusts, managed by Anthony Bolton, which raised gross proceeds of £460m. (article continues below)
The John Laing Infrastructure fund flotation is the second biggest. Brown says it caps off a good year for the sector.
“The major theme has been that investors have been searching for income in a low interest rate environment,” he says. “Anthony’s fund launch was the biggest in a number of years and it was good to have such a high profile launch.
“The big themes have been for groups launching emerging market or income funds, or in the case of JP Morgan, an emerging market income fund with the JPM Global Emerging Markets Income trust, which raised £104m earlier this year.”
Other launches have included the Aberdeen Latin American Income trust, the JPM Brazil investment trust and the Polar Capital Global Healthcare Growth and Income Trust.
The John Laing Infrastructure fund also looks for income, targeting an annual yield of 6% and an internal rate of return of 7-8%.
According to a statement, the placing and offer attracted strong demand from both retail and institutional investors, leading John Laing Investments to subscribe for only about 23.1% of the ordinary shares issued at launch.