Threadneedle, a UK based wealth manager, is aiming to raise £200 million for the launch a new investment trust targeting opportunities in the asset-backed securities market.
The new investment trust to be launched in October 2013 will target a net yield of 6%, distributed quarterly, and a total return of between 7% and 10% per year.
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The new trust will be domiciled in Guernsey and listed on the London Stock Exchange. The trust’s annual management charge will be 0.75%.
The trust’s portfolio will consist of asset-backed securities (ABS) and will be managed by Henry Cooke, head of Threadneedle’s European asset backed desk and formerly a real estate boss at Barclays Capital.
The portfolio will focus on mezzanine ABS from a global universe. It will invest primarily in short-duration floating-rate notes in an attempt to hedge against future interest rate rises.
Cooke said: "Since the financial crisis a number of areas of fixed income have rallied providing investors with some good returns, however asset backed securities are only now in the process of re pricing in line with fixed income markets.
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By GlobalData"ABS is a deep and wide asset class with over 8trn in assets globally, it is also an under researched area of fixed income providing opportunities for stock selection."
Alastair Caw, head of UK wholesale at Threadneedle, said: "We continue to see huge demand for income products, particularly those that can provide diverse streams of income. We therefore expect the fund to have broad appeal among sophisticated investors looking for regular income while providing some protection against rate rises and inflation."
