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
Brewin's Foster: the world’s most unconventional monetary policies

Brewin's Foster: the world’s most unconventional monetary policies

In this week's podcast, Guy Foster asks why the world’s biggest economies are pursuing some of the world’s most unconventional monetary policies. 

Play Charles Tan on Woodford & hidden trust income gems

Charles Tan on Woodford & hidden trust income gems

Cantor Fitzgerald investment company analyst Charles Tan discusses Woodford Patient Capital and some of the income trusts slipping under the radar.  

Play Taxicab Tenner: SGPB Hambros CIO Eric Verleyen

Taxicab Tenner: SGPB Hambros CIO Eric Verleyen

In the second episode of our new series, Verleyen jumps on board a black cab and explains how hard it's become to find good valuation on the market.  

Wealth Manager on Twitter