Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Utilico EM trust seeks to tap bond markets for funding

Utilico EM trust seeks to tap bond markets for funding

The £435 million Utilico Emerging Markets investment trust is hoping to raise debt by issuing its own bonds, rather than borrowing from a bank.

The trust has told shareholders that it has appointed Canaccord Genuity to arrange a series of meetings with fixed income investors in the UK to discuss issuing sterling-denominated secured bonds.

‘In light of attractive rates currently available in the debt capital markets, [Utilico Emerging Markets] is seeking to secure longer-term fixed-rate funding for the purposes of pursuing the company’s investment objective over a significant period of time,’ the fund explained.

Utilico Emerging Markets has traditionally used bank financing for portfolio leverage; it is currently 5.4% geared.

Its sister Utilico Investments fund, which is also managed by Charles Jillings and owns almost a third of Utilico Emerging Markets, has used zero dividend preference shares for gearing.

Utilico Emerging Markets has been a strong performer, focusing its investments on emerging market infrastructure businesses such as top holding Malaysia Airport Holdings.

Over the past three years, the trust has returned 21% on a net asset value basis and 29% in share price terms, while the MSCI Emerging Markets index has dropped 8%.

Yet to gain support for the proposed fundraising, Utilico Emerging Markets has committed to offering shareholders a continuation vote before the bonds are issued.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter