TwentyFour Asset Management is looking to increase the size of its newest investment trust in an effort to take advantage of recent market developments.
The firm has proposed the issue of £25m in new shares in its Select Monthly Income Fund to “qualified investors”, which will increase the size of the trust by more than 20 per cent from its current size of £123.3m.
TwentyFour said it was looking to raise the money because “recent macroeconomic developments have led to a number of investment opportunities within the company’s universe, which it perceives as offering attractive return and risk characteristics”.
The new shares will be made available at a 2 per cent premium to the net asset value of the trust on January 28, with the issue expected to close on January 30.
The trust is trading on a premium of 3.5 per cent, according to data from the AIC, and has been on a premium ever since it launched in March 2013.
TwentyFour said the new shares should also benefit existing shareholders, because the increased size of the fund would improve liquidity and the new money raised would “diversify and enhance the existing portfolio”.
The firm said it should be able to invest the new funds “on a basis consistent with the company’s dividend target”, which was to deliver at least 6 per cent per year to investors.
The trust, which is managed by Gary Kirk and Eoin Walsh, has struggled to generate returns since its launch as was caught in the general risk-off sentiment towards high yield throughout the second half of 2014.
But the company said it was increasingly positive on the return outlook for the trust and insisted the sell-off had presented them with opportunities to deliver future strong performance.