BDT Investment Management, a boutique investment house established in 2000, has introduced the establishment investment trust. This aims for capital growth through a portfolio of global shares, fixed interest securities and hedge funds.
The trust was designed as a rollover vehicle for a Luxemburg-based Sicav. It will not have a benchmark, so there are no specific geographical or sector weightings.
The lack of a benchmark means that the trust can invest wherever the manager feels the best opportunities are. However, BDT Investment Management specialises in emerging markets and the Far East, so the trust will invest mainly in these markets, excluding Japan. Economic reform has been slow to materialise in Japan and poor investment returns are still apparent, making it unattractive to this trust.
The trust can be geared by up to 50 per cent, but this is likely to happen only when circumstances make it a necessity. A bottom-up approach to stock selection will be used to identify companies that have good growth prospects, a competitive advantage over rival businesses and those which stand to benefit from changes to the economy and Government policies.
The trust is likely to appeal to experienced investors who are looking to add something more exotic to their portfolio. Despite its global focus, the preference for emerging markets which are characterised by instability makes it high risk.. However, some stocks are currently undervalued and investors could reap the rewards if their prices subsequently increase.