Liontrust to launch ESG fund with a £150m IPO

Liontrust to reinvest fees to develop financial instruments covering UN Sustainable Development Goals

Liontrust, the specialist fund management company, is launching its debut investment trust, an ESG set for a £150m IPO.

Liontrust ESG, as the trust is named, will invest in mostly developed markets across the world, with holdings in 25 to 35 sustainable companies.

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The Financial Times has reported that investment managers would be free to invest in smaller cap stocks due to the fund’s closed-ended nature, meaning there is less concern over short-term volatility.

Peter Michaelis, Chris Foster and Simon Clements, whom represent Liontrust’s sustainable investment team, will actively manage the trust’s portfolio.

According to research by Research in Finance, carried at at the end of last year, 78% of wealth managers and 71% of financial advisers have witnessed a growing number of clients looking for sustainable investments.

The trust managers will use a ‘sustainable future’ investment process, which according to the firm selects companies “helping to create a cleaner, safer and healthier world”.

Michaelis said: “We are excited by the opportunities that ESGT offers in being able to construct a high conviction portfolio with companies from across the market cap spectrum and our sustainable investment themes.”

“Key attractions include the wide opportunity set it provides as it is unconstrained by market capitalisation, a concentrated portfolio focused on the highest sustainability companies and the chance to invest a portion of the portfolio in small cap companies that we do not hold in our open-ended funds.”

“These stocks fit perfectly with our focus on the long-term drivers of the sustainable economy of the future.”

Michaelis also said that up to 10% of the management fee his company receives from ESGT would be used to fund research to identify and develop financial instruments covering those UN Sustainable Development Goals that are currently uninvestable.

John Ions, chief executive of Liontrust, added: “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.”

Liontrust launched in 1995 and was listed on the London Stock Exchange in 1999.

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