EFM seeks pounds 48m for new smaller companies trust

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The Independent Online
EDINBURGH Fund Managers is seeking to raise up to pounds 48m to invest in a new small companies investment trust, writes Paul Durman.

The firm has already secured commitments for pounds 37.5m from institutions, stockbrokers and independent financial advisers.

EFM said the recent change in investor sentiment towards smaller companies offered some excellent opportunities - although the sector's exceptional outperformance so far this year is unlikely to continue. In the first six months of 1993, the 22 per cent rise in Hoare Govett's extended smaller companies index beat the FTA-All Share index by 17 per cent.

The trust will be managed by Alastair Currie, who manages the Edinburgh UK Smaller Companies Fund. EFM says this unit trust was the best performing fund in its sector over the past 10 years, having risen by 354 per cent. The group has some pounds 500m of its pounds 1.8bn UK portfolio in smaller companies.

Alex Gowans, Mr Currie's predecessor as manager of the smaller companies unit trust, will be a director of the investment trust. Mr Gowans, who heads EFM's UK investment team, said the trust would invest in manufacturing, industrial and service-based companies, and would avoid high technology, oil exploration and property development. It would not be a recovery portfolio.

Investors will receive one warrant for every five ordinary shares they buy. Applications for shares must be made by 11 August and dealings will begin the following week. EFM will charge the trust a management fee of 1 per cent a year.