JP Morgan Asset Management (JPMAM) is to launch the Global Core Real Assets investment trust after raising £148.9 million for the listed fund investing in infrastructure, transport and real estate.
Although the initial public offer (IPO) fell slightly short of its £150 million target it comfortably cleared the £100 million required for the issue to proceed.
The company’s announcement this morning did not provide information on the investors who subscribed for the shares but before the launch JP Morgan was confident of securing the backing of two European institutions.
JPMorgan Global Core Real Assets (JARA) becomes only the fifth investment trust to float on the London Stock Exchange this year as investors have become choosy about backing new closed-end funds amid market uncertainty.
Last year JPMAM was disappointed when the launch of its Multi-Asset Trust (MATE) missed its £150 million target, with the bulk of the £93 million raised rolling over from a previous fund.
This time rocky public markets may have helped boost demand for a fund aiming to deliver annual returns of 7-9% once fully invested with a third less volatility than conventional equities.
John Scott, the new trust’s chairman, said: ‘Successful IPO launches in the closed-end fund universe have become few and far between in recent times. To see a fundraising so well-supported by a broad range of investors, both within and outside the UK, is testament to the shared conviction we all have in what JPMorgan Global Core Real Assets is seeking to deliver.’
JARA will invest in a portfolio of 500 private assets managed by JPMAM’s alternative solutions group, achieving a long-held ambition to diversify its largely equity fund offering to UK investors.
‘We’re delighted with this launch which marks a new chapter for our investment trust business,’ said Simon Crinage, head of investment trusts.
A total of 148,974,889 ordinary shares have been issued at 100p. They will start trading tomorrow on the London Stock Exchange with a net asset value of 99.01p.
The launch comes amid a flurry of fund raises by existing trusts investing in alternative assets.
Sequoia Economic Infrastructure Income Fund (SEQI), a £1.4 billion debt fund yielding over 5%, announced on Friday it had raised £138.75 million in an oversubscribed share placing. It will use the money to repay part of its borrowing facilities to enable it to draw down funds for new investments later this year.
Merian Chrysalis (MERI), which targets fast-growing, private ’fintech’ companies seeking to list on the stock market, said it would raise at least £100 million in its current share placing.
And Tufton Oceanic Assets (SHIP) has attracted $31 million of a targeted $50 million placing to invest in an ‘attractive pipeline of secondhand vessels’.
Although there have only been a handful investment trust launches this year, overall fund raising in the sector has been good with £5.3 billion raised in the first seven months, according to Winterflood Securities. This was up 36% on the same period last year and came mainly through secondary issuance from existing investment trusts as investors preferred to back tried-and-tested funds.
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