Smithson Investment Trust

lpgm

jimjames wrote: »

Are they now charging performance fees?

No, they're not. They're calculating the management fee on the market cap rather than the net asset value, and aroominyork above likened this to a performance fee.

RomfordNavy

Smithson don't seem to offer the same arrangement as Fundsmith for direct investment. You have the choice of having the holding with a Nominee (Link Asset Services) or a Certificated holding. However see the wording of the contract regarding the certificated holding below. I don't recall any of this complication when signing-up for direct investment with Fundsmith.

Any communications or documents, including share certificates, posted to you by us (or by
you to us) are posted at your risk. If the
documents, including share certificates, are
lost there may be costs associated with
obtaining a replacement. For instance, this
may include you having to pay for lost share
certificate indemnity insurance which can be
a significant cost where the value of the
shareholding is high. If you would like for
your documents or share certificate to be
delivered to you by courier, or tracked
delivery, please contact us and this can be
arranged for an additional fee.

lpgm

RomfordNavy wrote: »

Smithson don't seem to offer the same arrangement as Fundsmith for direct investment.

Smithson is an investment trust; Fundsmith Equity isn't. An investment trust is a company run at arm's length from the manager.

schiff

Fundsmith: Terry Smith in the Financial Times 'Busting the Myths of Investment: Who needs income?'

Reads a bit like the trailer for the new IT!

schiff

"The demand for Smithson has been far higher than anticipated and so, to avoid having to scale investors back, we will be increasing the amount that we are looking to raise from £250m to £600m.

The retail share offer will close at 1pm on Friday 12th October 2018."

Today.

jayship

Not surprised that they have now decided to increase the offer to £600 million due to demand.

Will it open at a premium now?

bowlhead99

jayship wrote: »

Not surprised that they have now decided to increase the offer to £600 million due to demand.

Will it open at a premium now?

The intention was to operate at a much smaller fund size than their main fund's billions, as the strategy is to invest in smaller companies and Smith reckons the 'investible universe' of those meeting their criteria is only going to be about 100 companies worldwide, so if they hold 25-40 of them at any one size, investing relatively small amounts for easy liquidity, they only need a quarter billion or so to kick it off.


But now they are at £0.6bn...


I guess it makes sense to take the investors' capital if you can get it (rather than have a silly premium to NAV). And as some of the 'smaller' companies will actually have pretty hefty market caps, it probably won't be unmanageable at that level.



But it does bring back memories of Woodford Patient Capital a few years ago aiming to raise £200m, of which half would be in smallcap and private cap and the other half would be a largecap liquidity pool; and then deciding there was £800m available so they'd just issue that many shares and work out how to deploy it later. In they end they had a great wodge of cash looking for a home in early stage and growth companies and later were seen to have overpaid in a number of deals.


Smithson has not increased its fundraise to quite the same extent, and was always going to be going after bigger or more liquid companies than Woodford PC Trust, so you may not need to fear the same consequences - but there are some potential negatives here.

schiff

They hope to be substantially invested within 22 days.

short_butt_sweet

who'd have guessed that terry smith would rather have 1.1% of £600m than 1.1% of £250m?

RomfordNavy

Retail offering has now closed, I wonder how much they have raised towards their now £600m target.