Ruffer trust to more than double its 2021 issuance with £170m raise

Ruffer Investment Company is looking to raise a lump sum of £167m, more than doubling the amount of capital it has already raised this year.

“Since February of this year, the shares have, almost without exception, traded at a premium to the net asset value per share, indicating strong demand in the market,” the board said in a regulatory filing on Monday morning. The share issuance comes two weeks after Jonathan Ruffer halved his stake in the eponymous investment trust that he used to manage.

In the period since the start of February, the £660m investment trust, now managed by Hamish Baillie (pictured) and Duncan MacInnes, has issued almost 44 million shares at an average price of 286.38p and an average premium of 1.77%, raising a total of £125.9m. That means the investment trust has reached the limits of its 10% pre-emption rights granted at the 2020 AGM, plus two additional authorities obtained via EGMs during the year. 

Ruffer Investment Company has slightly underperformed the FTSE All Share so far this year, returning 17.3% compared to 17.6% in the index, according to FE Fundinfo.

Ruffer set to become one of the highest issuers in 2021

Now Ruffer Investment Company plans to more than double the amount it has already raised this year making it one of the highest issuers in the Association of Investment Companies sector in the year to date.

Baillie Gifford’s £955m Schiehallion investment trust, which is currently trading at a 53.3% premium, has issued £498.4m worth of shares so far this year, according to the AIC. The next highest issuer is Smithson, which has raised £469.1m, while Digital 9 Infrastructure has raised £450m.

Investment trusts with the highest YTD secondary fundraising

Source: AIC to 12 November 2021

It will issue 56 million shares under an open offer, offer for subscription and intermediaries. The issuance will take place at a price of 296.5p per share, a 2.8% discount to the closing share price at 12 November. The share price was down 1.97% on Monday morning.

This will open up the share issuance to retail investors who have been sidelined from the weekly tap issuance that the investment trust has been using thus far to keep its premium under control, the regulatory filing said. “The board values the strong support that has been shown for the company, particularly from retail investors,” it said.

The board of the investment trust said the benefits of the share issuance included: reducing the ongoing charges ratio by spreading fixed costs over a larger capital base; improving liquidity; premium control; and providing retail investors with the chance to buy new shares.

Existing investors will be offered shares on a one to four basis.