The Lemon Fool

Dear fellow investors,

What is your take on the forthcoming IPO for Mid Wynd International Investment Trust plc (MWY)? I believe that it is aiming to raise around 100M of new capital. For a trust with a market cap. of around 130M this will be effectively doubling its size overnight and could bode well for the trust if they invest the money well.

I don't presently have any holding in MWY, and indeed it has never really been on my radar: it only came to my attention through advertising for the IPO. However, having looked at it and taking into account the fact that it has been under new management (Artemis) for a few years, and considering that it seems to have a fairly coherent investment strategy (at least to my way of thinking), and noting that managers and directors have a fair amount of their own money invested, I am somewhat tempted (for a LTBH portfolio).

Any thoughts from my fellow investors?

Thanks very much.

ADifferentView

As with any of the slew of investment trust IPOs currently being pushed in the direction of retail investors, I’m inclined to stear clear given the fullness of market valuations. By all means put Mid Wynd on your “radar” but until it’s known exactly how much has been raised and how and where the additional funds have been deployed then I would tend to just wait-and-see. For if one believes (as I do) that a market correction is overdue and coming, no not where & no not when, and that fund management marketing departments have the practised knack of launching IPO offerings at the tops of market waves. Then speaking from past experience, I would be extremely reluctant to want to get involved in any IPOs at this particular juncture in time.

I agree with forrado on this provided he means 'know not when' etc. This seems to me to be an opportunistic raising of funds on the back of a strong market and is there not a change of investment style included? I did not read the prospectus in detail but I know that I rejected it.

Artemis is I think quite a good house so maybe I am being a bit unfair, but I would not be tempted.

Dod

Thanks to each one who posted a reply. Salutary warnings - much appreciated!

ADifferentView

I took the opportunity to (re)buy this on Youinvest having had to sell what I previously had on the Baille Gifford platform when they left to go to Artemis. It's always been a good global IT in my opinion and in fact the IPO was a good way of buying at par into a fund that had been trading on a premium for a long time, so while I appreciate that we are due a wider market correction at some point there was still a lot to like about this from my perspective. This explains the background to the IPO - http://citywire.co.uk/investment-trust-insider/news/mid-wynd-to-double-down-on-demand-with-100m-raise/a1014948

ap8889 wrote:I guess as most ITs trade at a discount, my question would be why pay full price at IPO?

It appears this IT was trading at a premium.

It seems a recent development that the managers of ITs are attempting to have a business plan to restrict discounts and premiums by buying back when there's a discount and issuing new stock when there's a premium. It makes sense to make them more directly comparable with ETFs and OEICs where there's no particular advantage in being a totally closed fund.