TwentyFour Asset Management is looking to raise up to £150 million for an investment trust that will offer monthly dividends.
The TwentyFour Select Monthly Income fund will target a total return of 8-10% a year, including a 6p annual dividend.
The managers intend to build a high-conviction portfolio of 50-75 positions and expect to extract premium returns by focusing on lower liquidity securities, such as small debt issues. These are unsuitable for daily traded funds and are therefore attractively priced.
The trust will use hedging instruments to manage duration, which is expected to be around two years initially.
TwentyFour launched an Income trust in March 2013, which has already attracted £300 million of assets. Since inception it has returned 21%, compared with an average of 1% from its AIC Debt sector.