Trustnet Magazine 59 February 2020 | Page 26

Your portfolio Last year reaffirmed the status of closed-ended funds as the go-to vehicle for unlisted assets, but Iona Bain says liquidity isn’t the only problem investors need to watch out for in this area Off the list 26 / 27 [ UNQUOTED ASSETS ] Investment trusts are the perfect structure for accessing less liquid asset classes and there has been an explosion in the number of vehicles focusing on this area over the past decade T he impressive progress of Scottish Mortgage, £9bn flagship of the investment trust sector, has highlighted the value of access to private companies. Baillie Gifford’s global trust can hold up to 25 per cent in unquoted stocks and through assiduous networking it has bagged early stakes in many pre-IPO growth stars. Its mantra is that a tiny number of companies have historically driven a huge proportion of all market returns, and the trick is to find them early. “It has built this network up to provide it with access, and these are not VC [venture capital] blue-sky companies, they can be quite substantial in their own right,” says Simon Elliott, head of investment companies research at Winterflood. “That access is not open to everybody.” Investment trusts are the perfect structure TRUSTNET trustnet.com