Asset manager Liontrust (LIO) has pulled the flotation of its first ever investment trust, Liontrust ESG Trust after failing to drum up enough investor support.
The abandonment of the trust is a blow for Liontrust, which has a reputation as one of the best asset managers in the ethical and environmental investment space, with its Liontrust Sustainable Future Global Growth Fund (3003006) proving a strong performer.
INSUFFICIENT DEMAND
While the launch of ‘ESGT’ received significant support from private investors, Liontrust said overall demand proved insufficient to meet the minimum £100 million of proceeds set out in the prospectus for the IPO (initial public offering).
This demonstrates just how challenging market conditions for raising funds for investment trusts are at present.
John Ions, Liontrust’s CEO, said ‘nearly 2,000 individual private investors demonstrated their confidence in the investment proposition, the long-term opportunities offered by ESGT and the track record of the Liontrust Sustainable Investment team.
‘We are disappointed we won’t get the chance to repay their faith through an investment trust after everyone worked so hard to secure its launch.’
CREATING A CLEANER WORLD
Liontrust ESG Trust was to be managed by Peter Michaelis, Simon Clements and Chris Foster, members of the firm’s sustainable investment team, as a concentrated portfolio of between 25 and 35 holdings including small cap stocks.
The idea was to invest in companies from around the world which help create ‘a cleaner, safer and healthier world’ through the more efficient use of resources, greater safety and resilience and improved health.
Commenting on the abandoned IPO, Michaelis explained that in marketing the trust, ‘we were encouraged by the positive reaction to the unconstrained and high conviction portfolio and the plan for us to fund research into developing financial instruments for currently hard to invest in UN SDG's (Sustainable Development Goals).
‘We will take the ideas we had developed for ESGT and continue to apply them to our open-ended funds for which there is strong demand.’
While the failure of Liontrust ESG Trust to launch is disappointing, investors do have other investment trust options to consider.
They include the recently revamped Jupiter Green Investment Trust (JGC), which under new lead manager Jon Wallace has shifted its focus to smaller, innovative companies in ‘difficult to tackle’ sectors.
