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Investment trust directors have been buying back into their funds as discounts widen and value opportunities increase, according to Winterflood Securities.

Simon Elliott, head of research for investment companies, said directors typically had holdings in their companies and had sought to top up following market dips.

He said: "If anything, there has been a bit of a buying trend over the last few months. A lot of the directors know a lot about the asset class. They have strong views, and that's why they're on the board."

Mr Elliott said the moves could help encourage investors. But he added share prices rose less often when directors bought into their own investment companies than when directors bought shares in their own operating enterprises.

"What a director would act on is broadly the same as a retail investor. There's not as much inference as with a director buying back into an operating company."

Mr Elliott said no one sector in particular had benefited from the trend. "It's been across the board."

According to Directors Deals, directors have favoured a diverse range of funds over the last two months. Examples include Indian real estate and infrastructure fund Trikona Trinity Capital, oil company lender CQS Rig Finance Fund and sub-Saharan investment portfolio Blackstar Investors.

Andrew Bonamour, a non-executive director of Blackstar Investors, said the fund's directors had been buying into it for some time, particularly as the fund was trading at a 50 per cent discount to NAV.

But directors have also invested in portfolios at the centre of the financial crisis, including the New Star Financial Opportunities fund, which invests in equity, debt and other securities of pan-European financial institutions on a predominantly long-only basis.

Ravi Anand, director at New Star Asset Management, said outgoing chairman Martyn Chambers recently bought more shares in the trust as he saw value opportunities in the sector and felt the trust's manager Nick Brind was well placed to exploit them.

"He sees financials have had such a bad time and has confidence in the way Nick manages money."

Mr Anand said following the difficulties in financials, directors had also been putting money into the New Star Private Equity investment trust, a fund of private equity funds. Over one year to 30 June, the trust had dipped 15.1 per cent against 8.3 per cent for the AIC Private Equity sector.

"Private equity discounts have been wide, and we believe there's upside in the medium term," he said.

But like Mr Elliott, Mr Anand said the move would serve to encourage investors rather than provide a sure-fire indicator the share price would rise.