2013 was the best year for IPOs of listed investment companies
since 2007, in terms of both numbers of new funds launched and the
amount raised, with 21 London listed investment company launches
raising £3.5bn. Secondary issuance in the sector saw existing
funds raise an additional £2.5bn. The market hasn't quite
reached the boom in launches of the period 2005-07 which saw 215
fund launches in a three year period but this is a return to the
typical number of listed fund launches of the era before the boom
but with much higher values than those days.
The theme with respect to investment strategy for 2013 continued
on from 2012 with a focus on energy and income generation across a
number of fund launches and this seems to have continued as we
enter 2014. There are already two new investment companies which
have announced their intention to list in 2014; Ingenious Clean
Energy Income Fund and Next Energy Solar Fund, both of which are
intending to invest in energy generation.
In terms of domicile selection Guernsey continues to be the
listed investment company domicile of choice with more London
listed entities than any other jurisdiction except the UK. In 2013
this trend was reinforced: of the 21 London listed investment
company launches in 2013 twelve were incorporated in Guernsey, four
in the UK, four in Jersey and one in the BVI.
Guernsey is very familiar as a domicile with investors, fund
managers and their advisors in the investment company sector but
also saw a number of Initial Public Offerings (IPOs) of trading
companies in 2013 such as: Africa Oilfield Logistics Limited,
African Potash Limited and Central Rand Gold Limited (all AIM
listed, Guernsey incorporated trading companies) while Sherborne
Investors (Guernsey) B Limited was a Specialist Fund Market (SFM)
listed, Guernsey incorporated company which hit the headlines when
it began to build a stake in 3i.
At Carey Group we are working on a number of IPOs of Guernsey
incorporated trading companies at the moment and already act for
PPHE Hotel Group Ltd. which is a Main market listed, Guernsey
incorporated trading company. We have a large exposure to real
estate investments and increasingly we are seeing a trend for
property companies being formed as just that and not as property
funds, this may be as a result of the introduction of a European
Alternative Investment Fund Managers Directive and the imposition
of additional regulatory burdens on entities constituted as
alternative investment funds.
A number of Main market listed entities have subsidiaries with
Channel Islands Securities Exchange (CISE) listings, while others
use CISE for a dual listing alongside an AIM or SFM listing. In
2013 Carey Group acted as CISE listing sponsor with respect to a
number of very high profile entities including: Doric Nimrod Air 3,
NB Distressed Debt Investment Fund Limited, Baring Vostok
Investments Limited, Resonance Wind Finance Limited and InfraRed
The CISE had a challenging end to the year with a reorganisation
and renaming in December but now the dust has settled we have
already seen an increase in the number of new business enquiries
for CISE listings in early 2014. Carey Group already acts for over
100 listings on CISE including debt listings, trading companies and
It certainly seems as though the listed investment companies
sector is performing well. Interest rates are still at record lows
and investors are demanding income from illiquid income generating
assets and these fit best into a closed ended vehicle. A stock
exchange listing, especially while discounts are at record low
levels (around 3.4%), is an attractive option to investors because
it provides liquidity. It seems as though the listed investment
company sector is well placed as the UK economy returns to growth
but what does the future hold in 2014?
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