Numis Securities believes interest from multi-managers will drive demand for specialist closed-ended funds investing in areas that cannot easily be accessed through Oeics and unit trusts.
The research firm points out that multi-managers, along with private client stockbrokers, wealth managers and institutional investors, have accounted for much of the demand for closed-ended infrastructure funds and specialist investment trusts such as CATCo reinsurance opportunities.
It says many multi-managers take a top-down approach to asset allocation, which is more suited to exchange traded funds, but there may be asset classes that are not available through ETFs.
Multi-managers who prefer active fund management to ETFs could also find that they are too big to access some markets on the secondary market, so their only access would be new closed-ended funds or new shares issued by existing funds.
The firm thinks new investment trust issues will focus on specialist investment mandates, particularly those providing an attractive yield or access to particular emerging market countries and asset classes.
Head of investment companies research Charles Cade says: “We believe that the key buyers of investment trust issues will continue to be discretionary private wealth managers and multi-asset managers.”