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AIC Ian Sayers

Launch activity returns to the investment funds sector

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2010 has seen an improvement in markets and investor sentiment across most industries and the UK economy has crept out of recession. 

A recent poll of investment company managers conducted by the Association of Investment Companies found confidence amongst fund managers was up 18 per cent on the previous year with an impressive 92 per cent predicting that markets will rise in 2011. 

Over the past 12 months, the average investment company is up 17 per cent, compared to the FTSE 100 which is up ten per cent.

For investment companies, 2010 saw a return to launch activity with 14 new launches raising GBP1.7bn since the start of the year compared to just four new launches in the whole of 2009 raising GBP566m. These new launches came from ten different sectors with a focus on emerging markets and specialist sectors.  

Fidelity China Special Situations was the biggest investment company launch in 16 years raising GBP460m on launch, followed by John Laing Infrastructure (GBP270m) and NB Distressed Debt (GBP134m). 

2010 has also seen heightened activity in the VCT industry with seven new companies launching, raising GBP104m compared to two in 2009.  The 2009-2010 VCT fundraising season was very successful, raising GBP340m – the fifth largest amount since VCTs were first launched in 1995. 

This year Aberdeen New Thai was the best performing AIC member investment company over one year, up 67 per cent.  It was closely followed by Aberdeen Asian Smaller Companies (up 66 per cent) and Mithras (up 65 per cent). 

The best performing companies over one year have come from seven different sectors: Asia Pacific, Asia Pacific excluding Japan, private equity, UK smaller companies, UK growth, global smaller companies and hedge funds.

The top performing AIC Member VCT in 2010 was Matrix Income & Growth VCT (up 61 per cent) followed by Downing Distribution VCT 2 (up 48 per cent) and Downing Planned Exit VCT 2 (up 46 per cent).  

Ian Sayers, director general, AIC, says: “With the industry finishing 2010 on a high, it will be interesting to see what 2011 has in store. The industry has seen a boost in new launches this year in a wide variety of different sectors and it is promising to see that 95 per cent of managers polled by the AIC believe this level of activity will continue or increase in 2011.” 

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