Edinburgh bullish about trust's future

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The Independent Online
EDINBURGH Fund Managers yesterday brushed aside fears about the impact of the US interest rate rise on emerging markets as it launched a Latin American investment trust.

Mike Balfour, Edinburgh's overseas director, said: 'People have been saying emerging markets are a bit stormy and overheated. I think that this little dip today is only a short-term thing and will prove that they're not as speculative as people make them out to be.'

Edinburgh Inca Trust will seek to raise up to pounds 100m through an offer for subscription that will run for two weeks from mid-March. Presentations to institutional investors will start today.

Mr Balfour said 40 per cent of exports from Latin America go to the US so the region would benefit from strong US economic growth, which prompted Friday's 0.25 per cent rise in US interest rates.

Edinburgh Inca will follow the investment policy it applies to EFM Dragon, which invests in emerging Asian economies.

About 70 per cent of the fund will be invested in medium and large companies, with the rest in companies with capitalisations of less than dollars 500m.

The initial portfolio split will be 45 per cent in Mexico, 22 per cent in Argentina, 15 per cent in Brazil, 14 per cent in Chile and 2 per cent in both Colombia and Peru.

Foreign & Colonial's venture arm also announced details yesterday of F&C Private Equity Trust, the first new trust in the venture sector for more than 10 years.

William Eccles, a director of F&C Ventures, said the firm hoped to raise at least pounds 20m for the trust, and another pounds 10m for a limited partnership fund that would be managed in parallel.

F&C wants to raise up to pounds 75m for the two funds. This would be invested in small and medium-sized unquoted companies, typically through management buyouts or the provision of expansion and acquisition finance. There are nearly 100,000 private companies with turnover of more than pounds 1m.

The trust will raise its money in two stages, with half payable in three weeks and the rest in November 1995.

The Kleinwort Benson Privatisation Investment Trust was three times over-subscribed at pounds 880.49m. The placing raised pounds 320m from institutions, with a further 180 million shares available to the public.

Applications have been scaled down as follows: 35 per cent of the first 2,000 shares; 31.45 per cent of 3,000-4,000; 25 per cent for the rest. Investors receive a free warrant for every five ordinary shares.