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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.

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Profile: The opportunity set that attracted Brett Williams to wealth management

Profile: The opportunity set that attracted Brett Williams to wealth management

Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

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