Wealth Manager - the site for professional investment managers

Register to get unlimited access to 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
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter