Asset manager Downing has raised £55m for the launch of its first investment trust, which will target returns of 15 per cent over the long term by focusing on micro-cap stocks.
The launch of the Downing Strategic Micro-Cap Investment Trust was originally expected to raise a minimum of £35m by its founders, with the ability to bring in up to £100m.
Small-cap specialist Judith MacKenzie, who already runs the firm's UK Micro-Cap Growth fund, will serve as lead manager on the trust, with the objective to "deliver the returns associated with private equity investing, coupled with the transparency of investing in listed companies."
Downing’s public equity investment team will work alongside Ms MacKenzie.
Richard Harris, director of investment trust sales at the trust's backer Stockdale Securities, described the flotation as larger than some associated with other high-profile names in the space.
In 2014, the River and Mercantile UK Micro Cap Investment Company raised gross proceeds of £51m. The Miton UK Micro-Cap Trust announced it had raised gross proceeds of £50m last year.
A number of fund houses have launched micro-cap offerings in recent years in a bid to tap a potential source of strong returns. Last year Liontrust launched an open-ended product in the space.
