US equities trust bucks tough fundraising environment with £100m IPO


The Gabelli Value Plus trust is to list on the London Stock Exchange on 19 February after a fundraising period described by Numis analysts as “a considerable success”.

The all-cap US equities trust, chaired by Witan Investment trust CEO Andrew Bell (pictured), has raised £100m from a placing and offer for subscription.

Run by GAMCO Investors founder Mario Gabelli and team, the trust is based on the Gabelli All Cap Value Equity Composite, which the company says has delivered 15.9% per annum net of fees since inception in 1977 – compared with an 11.8% annual return for the S&P 500.

Though the trust targeted up to £250m from its fundraising, Numis said the launch is more than respectable given the current environment for initial public offerings. ”

The vast majority of investment company IPOs in recent years have been focused on Alternative Income mandates, with only a handful of new equity funds launched,” Numis analysts said.

“In order to gain critical mass at IPO, funds with an equity mandate have typically needed the backing of a high profile fund manager.”

“In most cases, it is difficult to justify why an equity fund should adopt a closed-end structure unless the underlying portfolio is illiquid or there is the ability to enhance returns via the structure […] as a result, we regard Gabelli’s fund raising as a considerable success.”

Numis added a relative lack of US-focused investment trusts, coupled with Gabelli’s “good reputation”, may have helped the company’s case.

Though not the trust’s main focus, a dividend yield of between 1% and 3% per annum may also have attracted investors. The trust will charge 1% of market cap as a management fee, with no performance fee.