Investment trusts seem to be coming full circle. For most of the 20th century, they gradually moved away from their origins as entrepreneurial schemes investing in specific targets, often in Britain’s colonies, to running generalist equity portfolios. Today, they are raising record sums to fund a new wave of innovation in a period of rapid technological change.
Recent trends show investment trusts returning to their specialist roots. Among the 11 trusts to be launched this year, HydrogenOne Capital Growth specialises in hydrocarbon stocks to help promote opportunities in clean fuel and Seraphim Space Investment Trust is designed to fund space entrepreneurship, while Cordiant Digital Infrastructure and Digital 9 Infrastructure are the first two investment trusts with dedicated exposure to the infrastructure of the digital economy.
“The reason why investment trusts get involved in these private companies and assets is because there is no other suitable vehicle to access these exciting asset classes,” says Daniel Lockyer, senior fund manager at Hawksmoor Investment Management. “These trusts can provide a vehicle for investors to get exposure to sectors that are impossible [to access or] inappropriate within open-ended funds.”