Investment trusts have raised £8.7bn in 2021 so far, according to data from the Association of Investment Companies, a new record for the closed-ended space.
Secondary fundraising by existing investment companies has already breezed past the £5.7bn raised in 2020 and the previous record set in 2019 of £7.4bn.
The renewable energy sector accounted for £1.7bn or one fifth of the total raised, followed by the infrastructure and growth capital sectors, which raised £988m and £803m respectively.
Baillie Gifford’s Schiehallion fund had the largest individual secondary fundraising during the period, attracting £503m from wealth managers and institutions in a heavily oversubscribed C-share issue in April. It was followed by Digital 9 Infrastructure, which raised a further £450m after attracting £300m in its March IPO.
“Healthy fundraising by investment companies this year is a sign that they have bounced back from the pandemic and are continuing to meet investors’ needs,” said AIC chief executive Richard Stone (pictured).
“It’s particularly encouraging to see such significant fundraising for long-term assets in areas such as renewable energy infrastructure and ambitious growth companies. Directing capital into these areas is critical to rebuilding the economy as the recovery from the pandemic gathers pace. There is clearly strong investor demand, and the closed-ended structure of investment companies continues to provide investors with a proven means of gaining exposure to less liquid assets.”
2021 investment company IPOs fly past previous years
The value of new trust launches has also already exceeded the total for 2019 and 2020. There have been nine IPOs in the year-to-date, raising £2.1bn, including the Seraphim Space trust, which raised £150m.
However, not all trusts have successfully got off the ground. Liontrust’s hotly anticipated ESG trust fell short of its £100m target. Last year saw listings by the Tellworth British Recovery & Growth and Sanford Deland’s Buffettology Smaller Companies trust also called off.
See also: Scrapped Liontrust ESG Trust launch reflects challenging environment for fund raisings
