Just how difficult is it to raise a new equity investment trust at the moment? Downing LLP has announced it has raised £55.6 million for Downing Strategic Micro-Cap (DSM), well short of the £100 million it was seeking.
The company gamely pointed out it had surpassed the minimum £35 million it needed for a viable flotation. Nevertheless, the result must be a disappointment given the launch seemed to have everything going for it including a £10 million seed investment from a Downing venture capital trust.
With a well-known and respected fund manager (Citywire AA-rated Judith MacKenzie), a compelling investment story (under-researched, good value, growth stocks at the bottom of the UK stock market food chain) and the marketing support of Hargreaves Lansdown and Alliance Trust Savings, Downing must have thought it could do better than Miton (MINI) and River & Mercantile (RMMC) which both raised around £50 million for their micro-cap trust launches in 2014 and 2015.
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