Miton trust raises £28m for 'multi-decade' opportunity

The board of the £52 million Miton UK Micro Cap trust has announced that it successfully raised £28 million through the issue of 56 million new C shares priced at 50p each. The trust had targeted £30 million through the issue.

The new shares will be admitted onto the London Stock Exchange (LSE) on Friday, 19 February. After costs, the net proceeds of the issue are expected to be approximately £27.4 million, proceeds that fund manager Gervais Williams plans to use to take advantage of a "vibrant" UK smaller company market.

"We believe we are at a multi-decade turning point where the advantages and vibrancy of the smallest quoted stocks are yet to be recognised.

"With world growth stalling, there is now increasing interest in a universe of companies that has greater potential to sustain ongoing growth, especially if they come with the prospect of attractive dividends in the coming three to five years."

Warm reception

"Against the backdrop of difficult market conditions, it is very encouraging to receive such a warm reception from investors," says Williams.

Since its launch onto the LSE on 30 April, up to 16 February shares in the Miton UK Micro Cap trust have returned 2.4%.

This compares to a loss of 8% from the Numis Smaller Companies (excluding investment companies) index over the same period and a loss of 12.6% from the mainstream FTSE All Share index.

The Woodford Patient Capital Trust - which launched at the same time as Miton UK Micro Cap and also invests in smaller companies (although globally and with a focus on biotechnology) - has shed 18% of its share value over the same period.

Shares in Miton UK Micro Cap were trading up nearly 2% to 53.7p by lunchtime on Wednesday (17 February), pushing gains since launch to over 5%.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.