Jupiter Asset Management is to target emerging and frontier market income with the launch of a new investment trust to be managed by Ross Teverson and Charles Sunnucks.
The Jupiter Emerging & Frontier Income Trust will be admitted to the main market of the London Stock Exchange with plans to initially place £200m of ordinary shares, with the potential to issue a further £200m shares in the 12 months after the prospectus is published in mid-April.
Jupiter stated the new trust would be a “high conviction, long-only” investment trust, investing mainly in quoted global emerging and frontier market equities, although frontier market exposure will be limited to a maximum of 25 per cent of total assets.
It plans to adopt a benchmark agnostic approach, adding the combination of emerging and frontier markets exposure and an unconstrained approach would allow it to invest across a wider range of markets than would be typical for an emerging markets fund, enhancing its diversification of risk.
The strategy will take a multi-cap approach and have a concentrated portfolio of 40-45 stocks, and will target a minimum total dividend of 5.5 pence per ordinary share for its initial financial period from listing to September 30 2018.
Jupiter added the trust would consist of a “competitive annual fee” paid to the investment manager of 0.75 per cent, based on net asset value, and no performance fee. Meanwhile the board of directors, which prospectively includes Mark Dampier, Audrey McNair and Nick Moakes, would receive their annual fees in the investment trust’s shares.
John Scott, chairman of the Jupiter Emerging & Frontier Income Trust, said: "This is an exciting opportunity for investors to access some of the world's fastest growing investment markets and to do so under the auspices of an experienced investment management team. The company offers its shareholders an attractive dividend yield which has the potential to grow and, as an investment proposition, it presents a reduced level of correlation with the investment markets of the developed world than is a feature of many yield-based funds."
The prospectus for the trust is expected to be published in mid-April, with the results of the issue and the admission and dealing of shares estimated to take place in mid-May 2017.