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Downing Strategic Micro-Cap Investment Trust IPO raises £54.5 million
Investment manager Downing has successfully raised a total of £54.5 million for the launch of its first ever investment trust, the Downing Strategic Micro-Cap Investment Trust plc (DSM), lead-managed by award-winning smaller companies’ specialist Judith MacKenzie. An application for listing on the London Stock Exchange is being made, with admission anticipated on 9th May 2017.
The Trust had originally anticipated a minimum fundraise of £35 million, with the ability to raise up to £100 million, offering the flexibility to issue further shares when capacity allows.
With a target return of 15% p.acompound growth over the long term, the focussed portfolio and high conviction strategy of the Trust aims to deliver the returns associated with private equity investing coupled with the transparency of investing in listed companies. The strategic nature aims to mitigate risk by carrying out extensive due diligence along with pro-active engagement with investee companies.
Downing’s public equity investment team, which includes Alyx Wood, James Lynch and Nicholas Hawthorn, will work alongside Judith with the management of the Trust.
MacKenzie has over 20 years of experience in small company investing and is Citywire AA rated for the performance of her flagship Downing UK Micro-Cap Growth Fund (B Shares), which employs a similar investment process to the new Trust. The UK Micro-Cap Growth Fund has an impressive track record of delivering consistent outperformance with lower volatility than its benchmark, the Numis Smaller Companies plus AIM (excluding investment companies) Index. The Fund has returned 14.6% p.a since February 2011 which represents growth of 128.7% to 28 February 2017.
Judith MacKenzie comments:
“We are absolutely thrilled about the level of demand for the Downing Strategic Micro-Cap Investment Trust, with strong support coming from both institutional and retail investors. The appetite for the Trust demonstrates a real confidence and commitment to the strategy and experience of our investment team here at Downing. We have a strong team of micro-cap specialists who are excited to start implementing the work and research we’ve been carrying out for a long time which has been geared towards the Trust. We are optimistic around the timing of this launch, as we believe this to be a prime stock-pickers environment and we have identified a number of fantastic value companies who we will be working with to drive shareholder value.”
Hugh Aldous, Chairman of the Downing Strategic Micro-Cap Investment Trust says:
"This has been an excellent effort by a first-class Downing team, sponsors and lawyers. The Board is delighted with the market's response to this unique approach to micro-cap investment and it will be working closely with the managers in oversight and for the shareholders.”
The Trust IPO was sponsored by Stockdale Securities and Richard Harris, Director of Investment Trust Sales, comments:
“This is a larger IPO than other high profile managers in this space, which is testament to Judith and her team’s track record, as well as the demand for access to this type of strategy. We have been delighted to act as sponsors to what is an exciting and unique investment trust launch.”
“We believe there is significant opportunity in this part of the market, as companies in this part of the UK equity universe lack analyst coverage and institutional attention which drives pricing inefficiency and, therefore, attractive valuations.”
FOR PRESS ENQUIRIES, PLEASE CONTACT:
Pamela Morris, the lang cat Jean Birrell, Downing PR
0131 202 6037 07799 555353
NOTES TO EDITORS
Source: F.E. Analytics 29/02/2012 – 28/02/2017.
More about the Downing Strategic Micro-Cap Investment Trust plc:
- Concentrated portfolio of typically 12 to 18 companies with market caps of below £150 million at the time of investment
- Seeks to take strategic positions of 3% to 25% equity stakes in investee companies
- The Manager will proactively engage with investee companies where they believe they can unlock shareholder value through active and long-term engagement with management
- Target return of 15% per annum compound over the long term with a 3-7 year investment horizon (this is target only and not guaranteed)
- Closed-ended structure allows focus on a focussed portfolio of strategic investments
Risks: You should note that your capital is at risk with this investment. Past performance should not be seen as an indication of future performance. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. The price of shares in the Company is determined by market supply and demand and may be different to the net asset value of the Company. Forecasts are not a reliable indicator of future performance. Investments in the Company are also subject to risks associated with investments in the UK property market.
This is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. An investment should only be made based on the product literature or Prospectus. We recommend investors seek professional advice before deciding to invest. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest and target returns are not guaranteed. Any personal opinions expressed are subject to change and should not be interpreted as advice or a recommendation. Tax reliefs are subject to change in the future and personal circumstances. Past performance is not a reliable indicator of future results. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is authorised and regulated by the Financial Conduct Authority (Firm Registration No. 545025). Registered in England No. OC341575. Registered Office: Ergon House, Horseferry Road, London SW1P 2AL.
Fund Manager of the Year 2013 and 2015, Small Cap Awards, Citywire AA rated or the three year risk adjusted performance to 30/04/2017, Trustnet 5 Crown rating for the 3 year performance to 31/01/2017
 Return of 15% per annum compound over the long term (3-7 years)
 Citywire (for the 3-year risk adjusted performance 30/04/2014 - 30/04/2017).
 Source of all fund data: Maitland Institutional Services, Source of all index data: Thomson Reuters for the period 04/02/2011 to 28/02/2017. Past performance is not an indicator of future performance.
 River and Mercantile UK Micro Cap Investment Company Limited announced that it successfully raised gross proceeds of £50.6 million (27/11/14). Miton UK Micro-Cap Trust announced that it had raised gross proceeds of £50 million (28/04/15).