The Investment Company is adopting a new investment approach enabling it to own bitcoin and other assets aimed at protecting against inflation.
The trust, which is one of the oldest investment trusts in the UK, currently sits in the AIC UK Smaller Companies sector and is managed by Chelverton.
It will now be managed by Dowgate with Chelverton having resigned.
Dowgate will run it as a multi-asset portfolio with the aim of investing in three areas.
The first called “foundational reserves” invests in assets which are “outside the monetary system”, notably bitcoin, gold, silver and platinum.
Bitcoin is the only cryptocurrency the trust will invest in.
The second group of assets the trust will invest in are equities linked to the above assets, and other physical infrastructure themes.
The third part of the portfolio will invest in assets such as index-linked bonds, which are traditionally viewed as inflation hedges.
Bonds no longer provide the protection for investors taking equity risk in their portfolios
Jeremy McKeown is a consultant to Dowgate and involved in the launch of the trust.
He said: “The evolution of this fund is shaped by the thinking of our wealth managers.
“Their view is that the traditional 60/40 multi-asset portfolio is malfunctioning.
“Bonds no longer provide the protection for investors taking equity risk in their portfolios as a result of the debasement of currencies which we saw during the pandemic, and more generally government’s irresponsible fiscal policies.”
McKeown said that as a person in his 60s, and with a 40-year career behind him: “I am more interested in the preservation of purchasing power of than a high level of total return, and I will have quite a significant portion of my pension in this trust.”
He previously worked with Dowgate to launch Onward Opportunities, one of only two investment trusts to launch in the UK market since 2023.
The Investment Company has assets of £7.3mn right now, and will issue new shares with the aim of attracting clients to the new strategy.
Alongside that, existing clients will have the option to redeem their current investment at a discount of 5 per cent to the net asset value.
The discount in the market was 11 per cent prior to the announcement of Dowgate’s proposal.
All bar one of the current directors has agreed not to sell any of their shares in the trust, and so will be inventors in the trust after the strategy changes and Dowgate takes the helm.
The Investment Company is chaired by Ian Dighe who previously ran asset management firm Miton.
Dowgate currently runs two other investment trusts, Onward Opportunities and Cape Wrath.
david.thorpe@ft.com
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