But with so many specialist vehicles coming to market in this format, are there added attractions?

John Regnier Wilson, head of closed-end funds at Polar Capital, suggests the key advantage for more specialist vehicles is the fixed pool of assets.

“If you are in a less liquid area, you don’t have flows coming in or going out, as having lots of money coming in can be as bad as lots of money going out. Also if markets are tricky you do not have to run cash in case of redemptions, it also allows the manager to have a mandate with a lot more in small cap or illiquid parts of the market where volumes can be thin and not trade often.”

Simon Cordery, head of investor relations and business development for investment trusts at F&C Investments, agrees certain specialist areas of the market do work better in a closed-end form.

“There is only one real reason for that and that is the lack of liquidity in the underlying asset class that creates massive problems for a fund manager.”

He points out for example if a private equity manager is acquiring and disposing of illiquid assets, in a unit trust format large inflows can take time to be invested, and sudden outflows would be difficult to meet because of the nature of the underlying assets.

“But if those assets are within an investment trust, investors can get access to their capital by finding someone to buy their shares off them. So the portfolio manager isn’t taking the portfolio to pieces and putting it back together again every time there are fund flows in and out,” explains Mr Cordery.

The downside to this is the discount mechanism of investment trusts where the share price does not always reflect the net asset value of the underlying investments.

But he adds: “Discounts on investment trusts are nothing new. You might not like the price, but you do have liquidity in your investment.”

Alexis Barling, head of investor relations at Pantheon International Participations investment trust, adds that investment trusts are the only suitable method for gaining access to an asset class such as private equity.

“The way private equity funds are structured is that they are limited partnerships and the agreement normally lasts for 10 years with the possibility for a two year extension. So for those 12 years the investor is effectively locked in. So it is very illiquid, in comparison to other forms of investing, so a big advantage of investment trusts is that you have a difference in liquidity.”

In addition the minimum investment commitment for direct access to private equity can be in the region of millions of dollars, while an investment trust offers individual shares at a more reasonable price.

But its not just niche assets, quoted equities also benefit from the investment trust structure, where a fixed time horizon can allow managers to plan ahead.

Simon White, head of investment trusts at BlackRock, says: “The ability to take a five-year view by the manager gives a real benefit to the investment process because liquidity events can be planned. The manager has a clear view of how long they can hold any particular share and construct the portfolio in the medium term rather than having to worry about potential redemptions.”

Of the 12 investment trust launches in 2013, five of these sit in the AIC Sector Specialist: Debt sector, while a further four are placed in the recently established Sector Specialist: Infrastructure – Renewable Energy.

Jemma Jackson, PR manager at the AIC, notes: “The rise of the infrastructure and debt sectors is a good example of the rise of the specialist sectors. Many of these specialist sectors have an income focus, and it is the demand for income that has played a key role in the rise of specialist investment company sectors in recent years.”

Mr Cordery adds: “We’ve seen a number of cycles and every cycle you see a new type of asset using the structure. Emerging markets was relatively illiquid 20 years ago compared to today and investment trusts were very useful to raise money for those assets. Then a bit later, you were moving into property, then fund of hedge funds, and now we’ve got lots of different asset classes which all have various different characteristics but the underlying assets are generally illiquid. Every cycle has its own flavour.”

Nyree Stewart is features editor at Investment Adviser