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Split-cap fund to take a global outlook

Britannic Asset Management is launching a new split-capital investment trust focusing on global equities.

The Britannic global inc ome trust aims to raise £163;100m and will have a portfolio initially divided between global equities to provide growth and split-capital ordinary shares for income.

The sponsoring broker is Collins Stewart and the shares will initially be placed with institutions. Britannic investment manager Kevin Fenelon will manage the trust.

The trust will have two share classes. Geared ordinary shares with a target dividend yield of 8.75 per cent a year will account for 47.5 per cent of the trust and will be issued at 100p per share.

The second share class will be zero dividend preference shares at 12.5 per cent of the trust. These have an initial growth redemption yield of 9 per cent a year and will have a five-year life. They will also be issued at 100p.

The remaining 40 per cent will be made up from bank borrowing. The structure of the fund will be revised in five years. The trust opens for business on December 15 and carries a 1 per cent annual management charge.

Marketing director Doug las Ferrans says: “There has been a revival in interest in the investment trust sector in recent months and we believe there will be genuine demand for this product. Britannic has a skilled team managing equities. We believe that this is an opp ortune time for long-term investors to consider a split-capital investment.”

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