Actionable Ideas for Companies and Sponsors
Using the U.K. Investment Fund Market Across Sectors and Geographies
The U.K. is the largest fund market in Europe with over 300 funds listed in London and a market capitalization of over $200 billion. Issuers should be aware that these funds do not need to be U.K. or European-based businesses, as 20% of listed funds are focused on other markets. In addition, a diverse range of funds are listed, from specialist REITs to funds focused on healthcare royalties, renewable energy, energy efficiency, infrastructure, aircraft leasing and private equity.
Investment funds are structured as newly created companies that raise capital through an IPO to invest in a specific asset class. Fund candidates must have a differentiated investment opportunity that can attract institutional demand and demonstrate an ability to scale-up over time. These funds require a portfolio of seed assets or a clearly identified pipeline, with the objective to have the IPO proceeds fully invested within 9-12 months. There is broad investor interest in the sector, including pension funds, income funds, multi-asset managers, family offices and private banks. Yield is also an attractive aspect as 85% of listed funds pay a dividend that averages 4%. Jefferies is the #1 underwriter of U.K. investment funds since 2013, based on total equity issuance, having raised over $8 billion for our clients.