Investors will soon have a new way of accessing returns from the alternatives sector as an innovative new addition to the investment
trust sector prepares to list on London’s Main Market on 18 February.

Cabot Square Alternatives, which will trade under the ticker ‘ALTS’, is looking to raise £200m for investment not only in a portfolio of infrastructure, property alternative assets and specialist debt, but also in specialist alternative asset managers that run such projects as well.

The trust has received commitments of around £40m from three cornerstone investors, helping to underpin the proposition.

It comes to market targeting a 5% annual dividend yield and a net asset value total return of between 8% and 10% a year over the long term.

The aim will be to facilitate access to returns from direct investments in alternative assets, which offer diversification away from traditional equities and bonds, as well as sharing in the potential value creation of between four and six alternative asset managers themselves.

Direct investments are expected to be made in renewable energy and property alternative assets ranging from affordable housing, healthcare and education properties to solar panel farms as well as specialist debt secured against infrastructure and property assets.

The trust’s investment manager Cabot Square Capital has identified a pipeline of £500m of opportunities ‘with potential to scale to £1bn plus’.

Fund manager Keith Maddin tells Shares that targeting investments in infrastructure and property, rather than just a single asset type, will give the fund the flexibility to invest in the most attractive opportunities over time.

Maddin notes there is a shortage of capital and expertise in the market for infrastructure and property investments valued at between £1m and £25m. This is regarded as a sweet spot, where Cabot sees ‘attractive risk adjusted returns for those willing to and able to invest in this range’.

Significantly, the trust plans to report on ESG as well as financial results, a move which will chime with increasing investor concerns over climate change and sustainability.

‹ Previous2020-01-30Next ›