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Opportunity knocks as BFS picks US smaller companies

BFS Investments is launching a new split-capital investment trust investing in US smaller companies.

The BFS US Special Opportunities trust will aim to provide capital growth and high income through investing in equities and convertibles issued by US smaller companies and UK high-yield securities.

The trust will be a Londonlisted split-capital investment trust with a planned life of seven years.

It will be capped at £100m and will issue share capital of zero-dividend preference shares, income shares and capital shares. BFS has arranged a bank loan facility for gearing which will equal 35 per cent of initial gross assets.

Sixty per cent of the fund will be invested in a growth portfolio of equity and convertibles of US smaller companies. Forty per cent will be in an income portfolio which will consist of high-yielding shares of investment trusts and convertible bonds.

HSBC Investment Bank and RP&C International are sponsoring the issue.

BFS chief executive officer Tony Reid says: “We believe US smaller companies offer many attractive opportunities for investment.

“A lack of analyst coverage and sponsorship in this sector has resulted in attractive equity valuations and financing opportunities.”

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