Share placing by real estate investment trust ‘significantly oversubscribed’ with care homes investor taking four times what it looked for last month.
The share placing launched by Impact Healthcare (IHR) last month has been ‘significantly oversubscribed’ with the care homes investor taking £100 million from investors, four times what it looked for.
The result is a big boost for the two-year-old real estate investment trust – whose £210 million market value makes it the smallest of four funds in its sub-sector – after it had to cancel a fund raising in the midst of turbulent stock markets last November.
The company received applications for over £100 million so investors’ allocations will be scaled back by its brokers Winterflood Securities and RBC Capital Markets.
A total of 94.3 million shares will be issued next Wednesday at a placing price of 106p. This was set at a small premium to the net asset value (NAV) per share of 104p as at 31 March and a 2% discount to the 108.5p share price before the fund-raise was announced. This is where the shares stand today on a 5.5% dividend yield.
Chairman Rupert Barclay said: ‘This successful capital raise of £100 million will enable the company to build on its successes to date by executing on its pipeline of attractive near-term investment opportunities, each of which is expected to generate further value for shareholders.
‘These investments are expected to enhance the diversification of the portfolio and tenant mix and enable the company to invest in the next phase of organic growth within the group’s existing portfolio.’
Launched in March 2017, Impact has built a portfolio of 73 care homes and is in talks regarding five transactions worth £128 million.
The successful placing comes amid a revival in investment company share issues. According to Winterflood, £2.95 billion was raised by London-listed closed-end funds in the first four months of the year, 43% more than a year ago.
Last month saw US Solar Fund (USF) raise $200 million (£153 million) in the second investment company flotation - or initial public offer (IPO) - of the year. In addition, several recently launched funds have returned to the market to take advantage of investors' renewed confidence after the stock market falls at the end of last year.
Royalties fund Hipgnosis Songs (SONG) raised £142 million in just one day, pre-IPO investment trust Merian Chrysalis (MERI) almost doubled in size after attracting £100 million and SDCL Energy Efficiency Income (SEIT) drew £72 million.
Investor favourites including Scottish Mortgage (SMT), Smithson (SSON) and Finsbury Growth & Income (FGT) have continued to issue more shares, contributing to £258 million raised by trusts through regular share issuance in April.