Four of the best new investment trust listings
Diversify your portfolio and benefit from rising dividends with these four new investment trusts coming to the market soon.
There has been a scramble recently to launch initial public offerings (IPOs) of new funds before the winter sets in, when markets could lose some momentum. The competition is especially intense in the world of real assets: funds backed by property, forests or infrastructure. The new funds tick multiple boxes. They are suitable for investors keen on environmental, social and governance (ESG) and sustainability, while they also allow you to earn income and diversify your portfolio.
Seeing the wood for the trees
Forestry specialist Foresight, which manages £7bn in assets, hopes to raise up to £200m for its Foresight Sustainable Forestry Company (LSE: FSF). It is targeting a yearly net-asset-value (NAV) return of consumer-price inflation (CPI) plus 5% on a rolling five-year basis. If CPI rates stay where they are (3.1%) that would imply a yearly return of 8%. Its forests, most of which are in Scotland, are worth £138m.
Foresight has been managing forestry assets for some time, largely through its inheritance tax (IHT) fund. That private vehicle will own just under 30% of the listed trust. Investors will not benefit from any tax advantages available through specific IHT schemes, but there are other upsides. The fund is hopeful it can generate extra income through demand for carbon credits (generated by planting new trees), which the manager forecasts is set to rise 100-fold by 2050. The offer closes on 18 November, and dealing will commence on 24 November. It will be available on most retail-investor platforms.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
New solar-rooftops infrastructure fund Atrato Onsite Energy (LSE: ROOF), looking to raise £150m, is another attractive option. It offers a dividend payout of 5p (on the 100p issue price) for the first and second financial year; the payout is to increase progressively thereafter. The annual total return target is 8% to 10% in the first financial year after listing and over the medium term. The hope is that commercial buildings’ roofs will increasingly be plastered with solar panels that generate a steady income; the strategy is to invest in the photovoltaic-generation systems and then sell the power via long-term, indexed power purchase agreements to the occupiers of the buildings on which the assets are installed. Atrato says it has identified potential acquisition opportunities worth £300m. It looks set to close its offer – also available on most retail platforms – by the end of November.
Private investors won’t be able to buy shares in Alinda Capital Infrastructure, which is seeking to raise up to £350m, as it is initially listing on the market’s specialist-funds segment, which is only open to institutional investors. But they can do so post-IPO via the secondary market on most retail platforms. Alinda Capital invests in firms that make money from infrastructure relating to transport and logistics, utilities and digital networks. It is targeting a yearly NAV return of between 10% to 12% over the medium term, with an initial dividend of 3.5p per share in its first full financial year, rising to 5p in the second financial year. The manager has an excellent record.
A promising Reit
Consider also Life Science Reit, a real-estate investment trust. It plans to list on Aim and raise £300m to invest in laboratories, offices and co-working spaces, manufacturing and testing facilities, and data centres. It will then rent these out. Life-sciences research is a burgeoning sector. The fund will exclusively focus on the “golden triangle”, which comprises research-intensive universities in Cambridge, Oxford and London.
The fund targets income-producing assets with a yearly NAV total return above 10% and an initial yearly dividend yield of 4%, set to grow to 5% in the early years. It’s expected to launch in mid to late November.
David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire.
He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com
David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space.
Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business.
David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust.
In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.
-
Private school fees soar and VAT threat looms – what does it mean for you?
Rising private school fees could see more than one in five parents pull their children out of their current school. Before you remortgage, move house or look to grandparents for help, here’s what you need to know.
By Katie Williams Published
-
Best and worst UK banks for online banking revealed
When it comes to keeping your money safe, not all banks are equal. We reveal the best and worst banks for online banking when it comes to protecting your money from scams
By Oojal Dhanjal Published
-
AstraZeneca CEO’s £1.8mn pay rise approved despite shareholder opposition
AstraZeneca hiked its dividend to persuade shareholders to accept CEO Pascal Soriot’s pay rise. Is he worth his salary?
By Dr Matthew Partridge Published
-
Adidas, Nike or Jordans - could collectable trainers make you rich?
The right pair of trainers can fetch six figures. Here's how you can start collecting vintage Adidas, Nike or Jordans now
By Chris Carter Published
-
The industry at the heart of global technology
The semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Three emerging Asian markets to invest in
Professional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
By Chetan Sehgal Published
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published
-
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published