- New emerging markets trust targeting £100 million
- EM valuations at multi-year lows
- White Oak Capital Partners hopes to repeat Ashoka India Equity success
London’s subdued new issues market has received a boost with the news Ashoka WhiteOak Emerging Markets plans to raise £100 million through an IPO (initial public offering) on the premium segment of the main market.
The new trust will look to capitalise on an attractive entry point in emerging markets, where valuations sit at multi-year lows relative to developed markets.
Ashoka WhiteOak Emerging Markets’ investment adviser will be White Oak Capital Partners, which has delivered an exceptional track record through its management of Ashoka India Equity (AIE).
But the question for prospective investors is, can White Oak can repeat its success with an India specialist trust with a generalist emerging markets portfolio?
Founded by Prashant Khemka, White Oak has forged a strong track record through its management of Ashoka India Equity and other strategies.
Ashoka India Equity raised £45 million at IPO in 2018 and has since grown to a market cap of £197 million, having significantly outperformed its benchmark over that period.
COMPELLING ENTRY POINT?
White Oak points out emerging market valuations are presently at multi-year lows relative to developed markets, with generally lower inflation, lower debt levels, and higher growth rates.
The investment adviser also believes emerging markets are benefiting from several secular tailwinds compared to developed markets, including increased infrastructure spending and rapid digitalisation.
White Oak’s investment approach targets well-managed, scalable businesses with superior returns on incremental capital at attractive valuations.
SEEKING £100 MILLION
Ashoka WhiteOak Emerging Markets is targeting gross proceeds of £100 million through the issue of 100 million ordinary shares at an issue price of 100p, by way of a placing, offer for subscription and intermediaries offer, with the prospectus expected on 18 April.
Similar to Ashoka India Equity, there will be no base management fee, with the manager entitled solely to a performance fee paid in shares based on outperformance versus the MSCI Emerging Markets Index in sterling over a three year period.
Ashoka WhiteOak Emerging Markets will also have an effective discount control mechanism, allowing shareholders an annual opportunity to redeem part or all of their shareholding on the basis of net asset value (NAV).
Khemka insisted ‘this easily accessible vehicle will provide investors exposure to emerging markets and the opportunity to generate significant alpha through exposure to a portfolio of great companies at relatively attractive valuations.
‘Our well-resourced investment team has the credentials and expertise that place us in a unique position to achieve strong capital growth for shareholders. We look forward to building a new listed entity in London.’
