US investment manager BlackRock is planning a secondary listing of its Greater Europe, equities-focused, investment trust on the Johannesburg Stock Exchange via the JSE’s fast-track listings mechanism.
This would give South African investors access to an actively-managed fund that is exposed to the European economic recovery. The BlackRock Greater Europe Investment Trust (BRGE) is invested in a combination of 30 to 60 small-, mid- and large-cap European companies, as well as some from the developing markets of Europe (such as Russia and Ukraine).
The strategy of BRGE is to identify companies with strong management teams, high growth prospects and that have high barriers to entry in their chosen markets.
While the listing of investment funds is not common in South Africa, it is a common practice in the US and UK, where they are known as closed-end funds or investment trusts.
South Africans are more familiar with unit trusts. Both are pooled investment funds run by a professional manager who picks and chooses a portfolio of assets on behalf of investors.
However, investment trusts are effectively companies that hold assets such as shares. The trust is run by a fund manager and is backed by an independent board. The company itself is listed on the London Stock Exchange (LSE) and pays dividends.
Unit trusts are the more common type of collective investment scheme and are also referred to as open-ended funds, because they will always accept more cash from investors – they just become bigger to accommodate the demand.
BRGE currently has a market capitalisation of £313 million (R5.5 billion) and has a primary listing on the London Stock Exchange, where it has been listed since 2004.
BlackRock Greater Europe Investment Trust share history
The net asset value for BlackRock Greater Europe Investment Trust as of October 20 was 352.79p, including income from the current year.
BlackRock has had a presence in South Africa since 2012 and until now was focused on providing institutional clients with exposure to a wide range of global asset classes and investment strategies. “We believe that a listing will present a very attractive, and easily accessible, investment opportunity for the South African investor seeking capital growth as the European economic recovery gets under way,” says Barbara Vintcent, MD of BlackRock South Africa. “European equity markets provide the scope to invest in a range of market-leading and globally-competitive companies on attractive ratings.”
PSG Capital is the corporate advisor and bookrunner to BlackRock Greater Europe Investment Trust in South Africa. This will be its second such listing – in November 2015 PSG brought the Schroders European Real Estate Investment Trust to the JSE, raising a R1 billion in a simultaneous listing on the JSE and LSE.
The listing is planned for the end of November, subject to generating a minimum level of demand.
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