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Terry Smith more than doubles Smithson target to £600m

9 October 2018

Star fund manager experiencing ‘very significant’ investor demand for launch of his new global smaller companies investment trust, hiking number of shares available in offer closing on Friday.

Smithson, the global smaller companies investment trust being launched by star fund manager Terry Smith, has more than doubled its fund-raising target to £600 million.

Citing ‘very significant’ investor demand the company has decided to offer a further 35 million ordinary shares at a price of £10, lifting the maximum that can be issued to 60 million.

A placing programme enabling the trust to issue shares in the 12 months after launch has been expanded from 10 million to 15 million shares, meaning another £150 million could flow in its first year.

Lord St John of Bletso, a director of the new company, has also doubled his investment to 10,000 shares at a price of £100,000.

If successful, this would make Smithson the biggest equity trust to launch this year, beating Baillie Gifford US Growth (USA) which raised £173 million in March.

The expansion of the offer, just three weeks after its launch, is reminiscent of Neil Woodford’s Patient Capital (WPCT) investment trust which raised a record £800 million amid a blaze of publicity over three years ago.

After a strong start it underperformed, raising questions over whether Woodford had attracted too much money to invest successfully in the early-stage healthcare businesses the trust has focused on, although there have been signs of a recovery recently.

The difference with Smithson is that it is targeting larger, more liquid investments in publicly quoted companies. It says it will invest 92% of the increased fund raise within seven business days, dismissing fears of it being stuck in cash for a long period like Smith's first investment trust, Fundsmith Emerging Equities Trust (FEET).

A supplementary prospectus has been published with the enlarged offer which will close at 1pm this Friday, 12 October. Applications to subscribe for the shares can be made through the following eleven stock brokers: AJ Bell, Albert E Sharp, Alliance Trust Savings, Barclays Bank, Hargreave Hale, Hargreaves Lansdown, iDealing.com, Interactive Investors, Shore Capital, SVS Securities and The Share Centre.

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