Japanese trust takes pounds 100m: Henderson Touche Remnant offer is second in a week to be oversubscribed

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The Independent Online
HENDERSON Touche Remnant, the fund manager, has taken pounds 100m with the launch of its Japanese Smaller Companies Trust, and will have to scale down the applications made by many investors.

This is the second time this week that an offer for a specialist investment trust has closed over-subscribed because of the weight of money from the public. Fleming Chinese Investment Trust raised pounds 60m and turned away another pounds 25m. Most of this money came from private investors.

Paul Manduca, chairman of HTR, said: 'I think what we are seeing is the start of this low interest rates and deposit earnings phenomenon, which has been running in America for some time.'

US investors have tried to get a better return on their money by pouring billions into mutual funds, the US equivalent of unit trusts.

UK fund managers have been eagerly looking for UK investors to move some of their money into equities. Unit trust companies are having their best year since 1987.

HTR had already placed pounds 75m of shares in Japanese Smaller Companies, with institutions making substantial investments. It is thought the firm could have raised a further pounds 35m from private investors and financial advisers in the offer that closed yesterday.

Mr Manduca said HTR Japan Smaller Companies was the largest investment trust launch this year, and the largest launch of a single country fund.

Dunedin, the Edinburgh firm half-owned by the Bank of Scotland, and Perpetual have both launched Japanese investment trusts in recent months, but Dunedin Japan took only pounds 20m and Perpetual's trust took pounds 36m.

Mr Manduca said: 'Maybe our timing was just slightly better.' Some well-known institutions decided they did not want to make their own investments in Japanese smaller companies, and preferred the investment trust route.

Dealings in the new trust begin next Friday. Allocation of shares will be announced on Monday.

Henderson Touche Remnant and its rivals are investing in Japan in anticipation of economic recovery and a strong revival of corporate earnings. Smaller companies are expected to outperform at this stage of the cycle.

Henderson Touche Remnant was formed when Henderson Administration took over the smaller fund manager at the end of last year. The firm is the largest manager of investment trusts, which account for nearly pounds 3.4bn of Henderson's total funds of pounds 12.5bn.

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