London Stock Exchange welcomes Downing Micro-Cap Investment Trust plc
Downing Strategic Micro-Cap Investment Trust (DSM) today opened the markets of the London Stock Exchange to mark the occasion of its Initial Public Offering and the admission of its ordinary shares on 9 May 2017.
The Company raised gross proceeds of £55.6 million, (net proceeds of £54.5 million) from a mix of institutional, private wealth and retail investors, and intends to use these proceeds to invest in a focussed portfolio of some 12-18 holdings of listed UK micro-cap companies, typically with a market capitalisation of less than £150 million. The investment team, led by Judith MacKenzie, will invest in companies they believe are undervalued and could benefit from both strategic and operational initiatives. The manager anticipates taking strategic positions of between 3%-25% of a company’s equity, and proactively engaging with investee companies where they believe they can unlock shareholder value through active and long-term engagement. The key rationale for the Investment Trust is based on the conviction that there is significant opportunity within micro-caps as companies in this part of the UK equity universe typically lack analyst coverage and institutional attention, thus driving pricing inefficiency and, therefore, attractive valuations.
The Trust has a target return of 15% per annum compound over the long-term with a 3-7 year investment horizon.
Judith MacKenzie comments:
"We are absolutely thrilled about the level of demand for the Downing Strategic Micro-Cap Investment Trust, with strong support coming from a broad range of investors. The appetite for the Trust demonstrates a real confidence and commitment to the strategy and experience of our investment team here at Downing. We have a strong team of micro-cap specialists who are excited to start implementing the work and research we’ve been carrying out for a long time which has been geared towards the Trust. We are optimistic around the timing of this launch, as we believe this to be a prime stock-pickers environment and we have identified a number of fantastic value companies who we will be working with to drive shareholder value."
Hugh Aldous, Chairman of the Downing Strategic Micro-Cap Investment Trust says:
"This has been an excellent effort by a first-class Downing team, sponsors and lawyers. The Board is delighted with the market's response to this unique approach to micro-cap investment and it will be working closely with the managers in oversight and for the shareholders."