Property and infrastructure trusts see inflows in Q1

Added 22nd April 2016

Volatility has meant that no investment trusts were launched over the first quarter of this year, while money that was raised was focused around property and infrastructure trusts, according to QuotedData.

Property and infrastructure trusts see inflows in Q1

The common refrain seemed to be that no decision could be made until after the referendum on Britain’s place in Europe, said QuotedData’s quarterly investment companies round up. But, the report showed that some established funds, "notably those paying attractive levels of dividend", saw substantial inflows of money.

Tritax Big Box REIT’s share issue was looking for £150m, but expanded the issue to £200m to respond to the overwhelming demand. Empiric Student Property’s share issue also went well, raising £125m. It spent about £39m of this in March on new student accommodation blocks.

Redefine’s share issue allowed it to proceed with the acquisition of a property portfolio from Aegon. GCP Student Living’s share issue was a bit more modest than Empiric’s but it highlighted the demand from investors for student accommodation funds.

Property funds have also dominated the fund list of the ten trusts that have become more expensive relative to their NAV over the quarter, said the research firm. However, some property-focused funds were included in the list of those that have become the cheapest as well.

Three debt funds -Blackstone/GSO, P2P Global and Ranger- all moved from trading close to asset value to mid-teen discounts during the quarter. “We have yet to see any of these funds take action to tackle the problem,” said QuotedData.

Meanwhile, as discounts have widened out almost across the board many funds have been stepping up their buy-back activity, including NB Global Floating Rate Income, which continued to buy back its shares aggressively while SVG Capital used a combination of buybacks and a tender to return c£60m to investors and NB Distressed Debt Extended Life has been proactive in buying back its shares.

Dexion Absolute -once one of the largest listed hedge funds- was the largest fund to leave the sector entirely during the quarter, as it was put into liquidation in March 2016. The largest amount of money leaving the sector came from Highbridge Multi Strategy Fund (former Bluecrest AllBlue), as they embarked on a process of winding up all their external funds.

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