Terry Smith's Fundsmith is planning to float the Smithson investment trust next month, which will invest in global small- and mid-cap companies.
It is seeking to raise up to £250m via a placing, an offer for subscription and an intermediaries offer of ordinary shares, while a twelve month placing programme will also be launched.
The trust will focus on companies with a market cap of between £500m and £15bn, with an average of £7bn.
The Smithson investment management team will be led by Simon Barnard as investment manager and Will Morgan as assistant investment manager, who both joined the group from Goldman Sachs. Fundsmith founder and CIO Terry Smith will provide advice and support to the managers. Jonathan Imlah will assist as a research analyst.
Terry Smith himself will invest £25m into the new vehicle, while Fundsmith partners and employees will invest an additional £5m.
Fundsmith will take on the costs of launching the trust, which will have an annual management fee of 0.9%. This will be based on Smithson's market capitalisation, not the commonly used NAV, which is a model the group said aligns the interests of the manager with shareholders.
Smith commented: "Last year we hired Simon Barnard and Will Morgan from Goldman Sachs to research the opportunity presented by applying Fundsmith's proven investment process to companies typically smaller than the ones the Fundsmith Equity fund would invest in, hence the name Smithson.
Barnard added: "Over the last year, the Smithson team has identified and researched an investable universe of 83 compelling companies, from which we will select 25 to 40 portfolio companies at launch,that we believe can compound in value over many years, if not decades.
"I, along with other members of the team, will be investing significantly in the fund at launch."
The offer for subscription and intermediaries offer is set to close on 12 October, with admission and dealing in ordinary shares set for 19 October.
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