Unicorn Asset Management has established an investment trust that is modelled on its existing eaglet trust.
The falcon investment trust aims to produce capital growth by investing in a portfolio of UK smaller companies with a market capitalisation of between £150m and £1bn. Peter Webb, who runs the eaglet investment trust, will jointly manage the trust with Paul Harwood. Harwood managed the Mercury European and Mercury recovery trusts before joining Unicorn in July 2000.
Falcon will be benchmarked against the Hoare Govett Smaller Companies Index, excluding Investment Companies, which represents the bottom 10 per cent of UK companies in terms of market capitalisation. Companies with a market capitalisation of below £1m may not seem small from an investors' perspective, but smaller companies are larger than they used to be, while larger companies have also grown bigger as a result of their European or global outlook. However, it is expected that most of the stocks selected for falcon will be in the £150m to £300m.
This trust is likely to attract fairly experienced investors, as those with limited investment experience may feel unsure of investment trusts, despite the potential growth prospects available through undervalued stocks in the smaller-companies sector.
According to Standard & Poor's, the eaglet investment trust is ranked 1 out of 27 trusts based on £1,000 invested on a mid-to-mid basis with net income reinvested over three years to November 19, 2001.