Activity in the investment company sector raises £967 million in first four months of 2011

After a bumper year for fundraising in 2010, boosted by some high profile launches, fundraising has continued in earnest in the investment company sector in the first four months of the year, with a total of £967 million raised, according to the Association of Investment Companies (AIC).

Whilst recently the environment for new launches has become more challenging, there have nevertheless been four new launches to date raising £451 million. There has also been a strong market for existing companies issuing new shares, it says.

Ten investment companies have issued new shares raising an additional £420 million. And whilst the AIC does not collate data on companies which have issued less than £5 million of share capital at a time, according to Winterflood Investment Trusts, a further £96.3 million has been raised through smaller issues of share capital. Collectively, some £967 million has come into the sector over the year to date.
 
New launches so far this year were: Duet Real Estate Finance (£50 million), Diverse Income Trust (£50 million), Henderson International Income (£42 million), and NB Global Floating Rate Income (£309 million).

Companies issuing new shares were: Cayenne (£6 million), Eastern European (subscription shares: £6 million), Edinburgh Dragon (£50 million), Fidelity China Special Situations (c shares: £166 million), HarbourVest Senior Loans Europe (c shares: £27 million), Infrastructure India (£58 million), JPMorgan Global Emerging Markets Income (c shares: £26 million), JPMorgan American (£9 million), MedicX Group (£34 million) and Origo Partners (convertible preference share: £38 million).

A further £127 million was rolled over into existing investment companies following the winding up of Anglo & Overseas, Eclectic (AIM) and M & G Equity (this split capital investment company came to the end of its fixed life). Henderson Global Property Companies rolled over into Henderson International Income.
 
Other companies which have left the sector this year are Gartmore Irish Growth, Tapestry, Dexion Commodities, CMA Global Hedge and Castle Asia Alternative, which meant that £268 million left the sector.  Whilst this was more than made up for by the £967 million raised, it reflects the constant ebb and flow of money into and out of the sector, the AIC adds.
 
The AIC does not collate data on share buy backs, but according to Winterflood Investment Trusts, £271.8 million has been returned to shareholders through share buy backs and a further £222.7 million has been returned to shareholders so far this year through tender offers.

‘Launch activity was very much a characteristic of the sector in 2010 and this has continued into 2011. Income has been a key theme amongst new launches this year, and also interesting is the number of existing companies issuing new shares, and encouragingly this has been across a wide variety of sectors,’ said AIC director general Ian Sayers.

‘Two of the companies which have issued new shares this year were launched last year, illustrating that new issues can continue to grow in size and attract new and existing investors,’ he added.