Polar Capital to launch a Global Financials Investment Trust

Specialist manager Polar Capital Holdings is seeking £100m to launch the Polar Capital Global Financials Trust plc (PCFT) on the London Stock Exchange, which will focus on the equity, debt and other securtities of listed financial stocks.

The listing will allow retail participation in a premium listing on a main market, the firm said. PCFT will have a fixed life to May 2020 with an Annual Management Fee of 0.85% per annum, based on the lower of market capitalisation or NAV of PCFT, so as to align manager and shareholder interests.

In addition, a performance fee may be payable at the end of the company’s life. Subscription shares will be attached to ordinary shares issued on IPO on a 1 for 5 basis, exercisable in April 2017 at a price of 115 pence (issue price is 100p per ordinary share).

Dealings are expected to start by the end of June 2013. Panmure Gordon (UK) Limited has been appointed as broker to the proposed IPO and has also been appointed as financial adviser to PCGF.

The financial sector, which represents 20% of equity markets globally, has been out of favour with investors through the financial crisis, but as it recovers there are opportunities to be exploited as major players such as banks return to more “normalised” dividend payouts, the managers believe. The portfolio will initially comprise 90% equities.

The two managers of the fund are Nick Brind and John Yakas (pictured). Both joined Polar Capital following the acquisition of HIM Capital in September 2010. Brind is also the manager of the Polar Capital Financials Income Fund. He has 18 years’ investment experience across a wide range of asset classes. Prior to joining HIM Capital, he worked at New Star Asset Management.

Yakas is also the manager of the Polar Capital Asian Financials Fund and Polar Capital Financial Opportunities Fund. He has over 25 years’ experience in the financial services industry and has been involved with the Asian Financials Fund since its launch in 1996 and the Financials Opportunities Fund since its launch in 2011. Previously, he worked for HSBC as a commercial banker in Hong Kong and Fitch IBCA in London covering European financials.

PCFT will seek to pay dividends at the rate initially of 3.1p annually (equal to an initial yield of 3.1%) with the aim of increasing the dividend progressively thereafter. The company Board, initially comprising three members, will, where they receive their fees personally, reinvest 50% of their net remuneration back into PCFT’s shares for at least the first five years.

John Regnier-Wilson, head of Closed Ended Funds, Polar Capital, said: “As with Polar Capital’s Healthcare Trust launch in 2010, we are again coming to the market with a call to action as we believe that this is an excellent time for investors to be revisiting this very large and under-owned sector. “

London-based Polar Capital has a staff of 85 of whom 43 are investment professionals managing 20 funds, seven managed accounts. These funds, which are aimed at institutional and professional investors, have combined assets under management as at 31 March 2013 of $7.2bn.

 

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