Colin Hughes, assistant fund manager of the Henderson Opportunities Trust, adds: “The chilling effect of the Brexit vote noticeably cooled companies’ enthusiasm to list on the stockmarket at the end of last year, with IPO [initial public offering] activity failing to reheat, even as market conditions settled. However, momentum now appears to be returning as London looks set to benefit from numerous flotations in the coming months.”
Mr Hewitt notes that typically only IPOs with a really strong story will make it to market and often, despite the overall environment, these are the ones worth investing in. “Expect income and alternatives to continue to dominate IPOs and C-shares. There is still a massive appetite for yield,” he says.
Mr White agrees that for potential IPOs there will continue to be a focus on income and alternatives. “Those who are already established in each particular alternatives subsector are at a huge advantage,” he says.
“Investors prefer to back these main contenders – which are known for their liquidity –in each category rather than take the risk on the launch of an unproven newcomer.”
With prime minister Theresa May triggering Article 50 to formally begin the UK’s exit process from the EU this week, the future remains anything but certain, and any changes in investor sentiment could determine the success or otherwise of new entrants into the investment trust space.
Nyree Stewart is features editor at Investment Adviser
