JP Morgan targets alternatives sector with fund launch

JP Morgan targets alternatives sector with fund launch

Demand from clients seeking exposure to alternative assets was behind the decision by JP Morgan to launch an alternative assets investment trust, according to the company’s head of trust, Simon Crinage. 

The JP Morgan Real Assets investment trust will be run by Philip Waller and colleagues on the alternative investments desk at JP Morgan.

Mr Crinage said clients have increasingly asked about opportunities to invest in the asset class globally.

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He said: “We have a big alternatives business globally, and we have, for some time, had clients asking us could we do something in this space so we have known for quite some time there is demand for a global real assets fund.

"A lot of the products out there that advisers can buy in the space are mostly invested in the UK, and they tend to trade on big premiums.” 

The fund will invest in infrastructure, real estate, transportation, and listed equities of companies in those sectors and others. 

The management fee is 0.98 per cent at launch and the trust will target a return of between 7 and 9 per cent per year, net of fees. 

The initial fundraising target for the trust is £100m, though Mr Crinage said the aim was to issue more shares in future and for the trust to grow.

He said he expects significant demand for the shares from investors outside the UK, and this was one of the reasons the trust has a relatively long offer period, ending on September 19. The August holiday period was another reason.

Mr Crinage said alternative assets were “strategically important” for JP Morgan Asset Management.

Benjamin Benson, analyst at GDIM, a discretionary fund management firm in Cambridge said: “This is the type of opportunity investors are looking for currently, something outside of traditional markets that adds something unique to portfolios.

"JPM clearly have strong capabilities in this space with the size of their alternatives platform which is encouraging.

"An investment trust is also the right structure for this, as the underlying investments are usually less liquid, so a daily dealing structure would be less attractive. It is certainly an attractive prospect."