Lindsall Train Asset Management is to launch the Lindsall Train Investment Trust on 22 January 2000,...
Lindsall Train Asset Management is to launch the Lindsall Train Investment Trust on 22 January 2000, to be managed by Nick Train, writes Fiona Henderson.
The company intends to launch four funds, one of which will be a Japan hedge fund, scheduled for the first quarter of next year. Lindsall Train Asset Management has three business principles that it looks to reflect in all its products, Train said.
He added: "We have a desire to create a strong alignment of business between ourselves and investors, particularly those that have been supportive of the company since its inception. Our second pledge is that we will not launch a product in which Lindsall Train Asset Management has not invested. Thirdly, we are in the business of generating absolute returns in every mandate, rather than returns relative to a benchmark."
The investment trust will have four characteristics that Train believes will be in line with the business principles. Lindsall, Train and their immediate families will own a minimum of 10% of the capital of the investment trust.
The trust has the right to acquire a 25% stake in the equity of the Lindsall Train Asset Management company. Train said: "It will be up to the board, but we expect this to happen. It is a ground zero investment and will cost less than £75,000 to acquire 25% of Lindsall Train Asset Management. In essence, a quarter of all future profits will belong to the shareholders of the investment trust.
"If Lindsall Train Asset Management were to fail, the maximum loss would be £66,000 to the investment trust. If it is successful, a quarter of all profits could be many times more."
Fees are to be charged on the share price, specifically the market cap of the investment trust and not on net asset value, which is subject to discounts often. The trust will have an absolute return, rather than a return relative to the benchmark.
Nick Train will manage the investment trust and the first day of trade will be the 22 January. Cazenove & Co is to sponsor the trust, which is capped at £20m.
The planned Japan hedge fund, which will be launched in the first quarter of 2001, is to be managed by Lindsall. Train said: "The remaining products will be absolute return vehicles based on our track records or expertise."
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