Liontrust to launch ESG investment trust

ESG trust is the asset manager's first closed-end investment trust strategy

11th May 2021 17:56

by Tom Bailey from interactive investor

Share on

This environmental, social and governance (ESG) trust is the asset manager's first closed-end investment trust strategy.

Liontrust has announced that is it launching a new environmental, social and governance (ESG) investment trust.

The trust will launch with a £150 million initial public offering under the name Liontrust ESG, with the ticker ESGT.

The trust will have a fairly concentrated strategy, investing in between 25 and 35 companies. The portfolio will mostly be composed of companies in developed markets.

Liontrust already runs several ESG and sustainability focused open-ended funds. According to the asset manager, through these open-ended funds and several institutional mandates, Liontrust’s Sustainable Investment team oversees around £10.2 billion worth of assets, up from £2.5 billion in 2017.  

This launch, however, will be Liontrust’s first closed-end investment trust strategy. According to the asset manager, the closed-end structure is attractive due to the fixed pool of capital it provides. This ‘permanency of capital’ will have the advantage of allowing the managers to be less concerned about shorter-term volatility and liquidity, in comparison to managing open-ended funds.

As a result, the Liontrust ESG portfolio will be fairly concentrated and be able to invest in several small-cap stocks that are not currently investable for Liontrust’s open-ended funds.

The trust will be managed by Peter Michaelis, Simon Clements and Chris Foster, who are part of the Liontrust Sustainable Investment team.

The trust will have a fee of 0.65%. However, 10% of the management fee that Liontrust receives from the trust will be used to “fund research to identify and develop financial instruments covering those UN Sustainable Development Goals (SDGs) that are currently uninvestable”.

Commenting on the launch, John Ions, chief executive of Liontrust, added: “This is a significant launch for Liontrust in expanding our offering into investment trusts. 

“The intention to launch ESGT recognises the growing demand for sustainable investment as an increasing number of people want their investments to make positive contributions to society, the environment and the economy. 

“ESGT will enable a wider range of investors to access Liontrust’s Sustainable Investment team and its proven process. Over the past two decades, the Sustainable Investment team has demonstrated the ability of its investment process to outperform mainstream benchmarks and the impact of its funds on sustainable development.” 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Related Categories

    Investment TrustsEthical investingAIM & small cap shares

Get more news and expert articles direct to your inbox