7th Mar 2014 16:12
LONDON (Alliance News) - Global Resources Investment Trust PLC was Friday trading flat at 100 pence in its first day of dealings on the main market of the London Stock Exchange.
GRIT is a new investment trust that will invest in junior natural resources and mining companies. Investments will be made in the field of exploration and production of oil, gas, precious and industrial metals, and industrial and commercial minerals. GRIT will primarily invest in quoted companies but may also hold some investments in non-quoted, seed capital or pre-initial public offering companies. It will target capital growth as opposed to dividends and will seek long-term absolute returns as opposed to returns relative to an index or benchmark.
It will be chaired by Anthony St. John, a hereditary member of the House of Lords.
Its initial portfolio is made up of 41 companies with a combined value of about GBP39.5 million, which it acquired it in exchange for about 39.5 million shares at GBP1.00 each. The expenses of the admission and the issue are GBP2.4 million.
UK-based investment management company RDP Fund Management LLP has been appointed as GRIT's investment manager.
Representing the investment manager, David Hutchins told Alliance News that the 41 companies in its portfolio were approached directly. The shares they currently hold in GRIT are set to be sold to institutional investors in the next four to six weeks, which will give them cash to take their projects forward.
"The mining sector has been pretty decimated from top to bottom over the past few years, with small-and-mid-caps suffering most," Hutchins said in a telephone interview. "A lot of these companies are under-owned, under-researched and have good assets." That means Hutchins expects there to be an uplift in the sector, which would be beneficial to investors.
Hutchins said the trust will also keep a close eye on its investee companies.
"We're a proactive investor looking to work with them but we're not looking for control," Hutchins told Alliance News.
The company has also raised GBP5.0 million for working capital and investment purposes through the issue of convertible loan notes to LIM Asia Special Situations Master Fund Limited and LIM Asia Multi-Strategy Fund Inc, two hedge funds related to Asian-based multi-strategy investment group Lim Advisors. According to the trust's prospectus, the loan note holders nominated James Williams, an investment banker who has worked for ABN AMRO after starting his career with ING Barings, to the board.
"With the natural resources sector at a cyclical low, and undervalued companies struggling to finance worthy projects, it is an opportune time for GRIT to join London's Main Market. By supporting these companies, GRIT offers investors a single access point to multiple global resource projects and the opportunity for investors to spread exposure," Hutchins said in a statement.
"We are an experienced management team with extensive knowledge of the sector, which we believe allows us to identify highly prospective opportunities. We look forward to updating the market with the performance of our portfolio," Hutchins added.
The trust enables investors to spread their exposure across multiple global resource projects through a single access point.
Hutchins, joined by Kjeld Thygesen, were involved with the listing of the Resources Investment Trust PLC, a specialist investment trust, on the official list in January 2002. Its objective was to generate capital appreciation in the medium to longer term through investing in undervalued companies in the natural resource sector.
Its shares were originally issued in January 2002 at 100 pence and achieved an all time high net asset value of 290.59 pence after which shareholders adopted a resolution to voluntarily wind up that company, according to GRIT's prospectus.
After the realisation of RIT?s portfolio, GBP54.5 million was returned to shareholders of RIT, from an initial investment of GBP15 million, equating to an absolute return of 363%, according to the prospectus.
Beaumont Cornish Ltd advised on GRIT's admission.
GRIT's initial investment portfolio can be viewed on page 43 of its prospectus: http://www.globalresourcesinvestments.com/wp-content/uploads/2013/01/final-prospectus.pdf
By Samuel Agini; [email protected]; @samuelagini
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