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Downing prepares micro-cap investment trust launch

Downing is preparing the launch of an investment trust with a concentrated portfolio of micro-caps

Downing Strategic Micro-Cap Investment Trust is hoping to raise £100m in an initial public offering (IPO) on 9 May 2017. The trust is aiming for a total return of 15 per cent a year from a portfolio of 12-18 publicly quoted companies with market caps under £150m.

The trust will be run by Judith MacKenzie, alongside Alyx Wood, James Lynch and Nicholas Hawthorn. Ms MacKenzie also manages MI Downing UK Micro-Cap Growth Fund (GB00B2403R79), which has returned 123.31 per cent over five years, compared with the Investment Association (IA) UK Smaller Companies sector average return of 90.2 per cent.

It will hope for greater success than Guinness Asset Management, which pulled an IPO of an investment trust last month after raising just £30m of its £50m-£100m target. The trust was to invest in 15 oil and gas exploration companies at launch, and increase its holdings to 30 positions.

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