Kleinwort raises pounds 320m for trust: Heavy demand for new fund investing in European privatisations

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KLEINWORT BENSON is on target for the second most successful investment trust launch of all time, having raised pounds 320m for a fund to back European privatisations even before today's opening of the public offer.

Simon White, managing director of Kleinwort Benson Investment Trusts, said the total could rise to pounds 400m. Last month, Mercury Asset Management raised nearly pounds 426m for its World Mining Trust.

Kleinwort Benson said the enthusiasm for the Kleinwort European Privatisation Investment Trust (KEPIT) had far exceeded initial expectations. The firm has received more than 10,000 inquiries about the fund.

Mercury Asset Management is also launching a trust to invest in European privatisations.

Both trusts will invest in the shares of previously state-owned companies. Other European nations are only just beginning the sell-off of state assets.

UK experience suggests very substantial returns can be made from privatised companies, as managements cut costs and respond to market pressures. Mr White said investment trusts would make it much easier for private investors to participate in European privatisations.

KEPIT will invest in utilities and industrial companies and expects to have 'a significant number of financial institutions and telecommunications interests'.

The minimum investment in KEPIT is pounds 2,000. Shares will be issued partly paid, with half the money due in six months' time. The public offer runs until 2 February, with share dealings starting one week later.