Investment trusts raise record £1.28bn in October

Baillie Gifford

Listed investment trust companies raised £1.28 billion in October 2019, the highest level of secondary fundraising ever seen in a single calendar month, according to new data from the Association of Investment Companies (AIC).

The second-highest month for fundraising by existing investment trust companies was June this year with £1.18 billion.

Investment trust companies in the infrastructure sector led the way, raising £405 million.

Next were the renewable energy infrastructure and music royalties sectors, which raised £380 million and £231 million respectively.

Music royalties-focused Hipgnosis Songs Fund was the company that raised the most in October with £231 million, followed by Renewables Infrastructure Group (TRIG) raising £228 million and 3i Infrastructure raising £223 million.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “This strong month for fundraising confirms that investors want what investment companies can provide.

“The closed-ended structure can offer exposure to a wide range of assets, including illiquid assets, without worries about redemptions leading to harmful short-term decisions.

“This makes it highly suitable for investment in infrastructure and renewable energy assets, for example, which formed a big part of this month’s record fundraising.

“At this very uncertain time, it’s encouraging to see investors putting their faith in investment companies, which have been around for over 150 years and survived multiple market crashes and shocks.

“No-one knows what the future may hold, but the investment company structure gives boards and managers the freedom to make decisions in shareholders’ best long-term interests, and steer companies through turbulent markets.”

The Association of Investment Companies (AIC) represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. 

The AIC has 362 members and the industry has total assets of approximately £198 billion.