Smithson: new Fundsmith Investment Trust to launch

[Backache]

Hmmm.... So offer now extended to 82m shares up from 60m to avoid scaling back. Who said the bull market was dead? I'm not sure how I feel about this tbh. I think I'd rather have been scaled back and to see a stronger after market.

https://www.investegate.co.uk/smithson- ... 00052685E/

Si

Personally I regard these things as long term investments. I would rather get the allocation I want at NAV than scrabble around later trying to make up a reasonable stake for the benefit of short term stags.

[Alaric]

I would rather get the allocation I want at NAV than scrabble around later trying to make up a reasonable stake for the benefit of short term stags.

According to ii, allocations will be met in full.

[Dod101]

The Smithson announcement is that all applications will be met in full and tomorrow trading starts so that should be interesting. It is a long time since I participated in an IPO.

Dod

[Darka]

I just received my full allocation yesterday.

[Dod101]

I have just checked. So did I although of course no price against it yet. Good. I am happy to look at this in the long term and am indifferent to what happens in the short term after market.

Dod

[westmoreland]

wow - £822m raised, over triple the original target. i thought the point of this was a small fund to target smallish companies without moving the dial on the price of the shares?

[flyer61]

Sold 1500. @ 10.377. The Mrs was very pleased with her punt. Not as happy as the person who sold 940000 @ 10.20...

Will be interesting to see where it finishes the day. Very good start given last nights fall on Wall Street.

[ADrunkenMarcus]

I wondered why they priced the shares at £10 as opposed to £1? Not that it matters too much!

My allocation is shown but with a nil value as it has not yet been converted into SSON. Not that it matters as it's in my pension and I intend to hold it for decades and benefit from superior compound growth over time.

Best wishes

Mark.

[simoan]

Sold 1500. @ 10.377. The Mrs was very pleased with her punt. Not as happy as the person who sold 940000 @ 10.20...

Will be interesting to see where it finishes the day. Very good start given last nights fall on Wall Street.

How could someone have sold 940k? That's more than the total volume as I write, which is 400k.

Si

[doug2500]

Managed to buy for a family member at 1013 (in an account that didn't offer the IPO)

I don't mind that as with a normal IT IPO costs of investing would have to come of the £10, whereas Fundsmith are carrying these costs so at least we're getting £10 of NAV for £10.13. Also FEET is normally at a premium so SSON might be the same.

When I first looked the price had shot up to 1030 -1045 and I wasn't going to pay that. By the time the broker sorted their end out to make SSON available the price had fallen to £10.20 (must have been about 8:40 by then) and I followed it down to 1013, then it went to 1013.7 and I bought.

[flyer61]

Sold 1500. @ 10.377. The Mrs was very pleased with her punt. Not as happy as the person who sold 94000 @ 10.20...

Will be interesting to see where it finishes the day. Very good start given last nights fall on Wall Street.

Amended, sorry! It was 94000...

[monabri]

The 'contents' of SSON seem to be a bit vague at the moment. Does anyone have a pointer to what is in the IT and at what percentages?

(As the investment trust is actually now trading I thought it would have been mandatory to have issued info on what is being traded on the market).

[Walrus]

The 'contents' of SSON seem to be a bit vague at the moment. Does anyone have a pointer to what is in the IT and at what percentages?

(As the investment trust is actually now trading I thought it would have been mandatory to have issued info on what is being traded on the market).

May be wrong here but pretty sure most of it will still be cash right now. I would hope they're initiating rather than agressing trades and expect it to be invested over this opening month rather than on day one.

[Lootman]

The 'contents' of SSON seem to be a bit vague at the moment. Does anyone have a pointer to what is in the IT and at what percentages?

(As the investment trust is actually now trading I thought it would have been mandatory to have issued info on what is being traded on the market).

May be wrong here but pretty sure most of it will still be cash right now. I would hope they're initiating rather than agressing trades and expect it to be invested over this opening month rather than on day one.

I used to work for a fund management company and, during that time, we launched a number of funds, some of which were heavily subscribed to. A few things about how it works:

1) There is usually "seed capital" which is money provided by the fund management company itself, so that there is never a point where the fund has no assets. These funds may be invested before the official launch date. Eventually this seed capital is repaid from the fund once it is established.

2) Typically the monies will be invested over a period of time. This is partly for the practical reason that you can't invest it all at once, not least because all the other market participants will know you have a lot of cash to invest, and can bid up the shares you are likely to be buying.

3) A fund can get a "head start" by investing in derivatives in the same market. These positions can then be wound down as the funds are invested, ensuring that the fund doesn't under-perform if the market takes off during this period

4) Whatever the fund holds is disclosed, but there are delays to that. It is to the evident disadvantage of a fund to disclose its holdings as people may just copy them or, worse, front run them. So info on what the fund holds is typically delayed by 1 to 3 months. You can look up what Buffett owned 3 months ago, but not what he owns now.

[Dod101]

I think it would help monabri if he thought of an investment in an IPO as buying a position in the fund rather than any underlying assets, so any premium or discount is reflecting the demand or otherwise for the fund rather than the desirability of the assets held. As Lootman implies, we all need to relax for the moment if we have got what we want of Smithson and let the managers get on with investing the enormous cash pile over the next few months.

Dod

[monabri]

Ah, thanks Lootman & Dod for clarifying the situation.

[midgesgalore]

The 'contents' of SSON seem to be a bit vague at the moment. Does anyone have a pointer to what is in the IT and at what percentages?

(As the investment trust is actually now trading I thought it would have been mandatory to have issued info on what is being traded on the market).

Their latest supplementary prospectus, under the section Risk Factors (page 4) says
"Delays in deployment of the proceeds of the Initial Issue may have an impact on the
Company’s results of operations and cash flows

As at the date of this Supplementary Prospectus, the Company has no investments, and pending
deployment of the Issue Proceeds intends to invest cash held in cash deposits and money market
funds. Interim cash management is likely to yield lower returns than the expected returns from
investments. Although the Investment Manager expects to be able to deploy 92 per cent. of the Issue
Proceeds within 7 business days (with the balance being fully invested within 22 days of Initial
Admission) ..."

Their original prospectus document has a risk factor section:
Page 19, check out the previous version of
Delays in deployment of the proceeds of the Initial Issue may have an impact on the
Company’s results of operations and cash flows
Here they, more simply, stated the majority of funds to be invested within 7 business days.

Also on page 40
Potential investment opportunities
sets out an expectation of 25 to 40 investments in a universe of 83 companies identified as meeting their buy objectives. No companies named however there is a table of how this is dispersed across the planet in geography and also by revenue

you can still download the original prospectus document from
http://tools.morningstar.co.uk/uk/cefreport/default.aspx?tab=12&SecurityToken=F000011DU3%5D2%5D0%5DFCGBR%24%24ALL&Id=F000011DU3&ClientFund=0&CurrencyId=GBP

midgesgalore

[doug2500]

IIRC from when FEET was launched for quite a while afterwards the factsheet on the website showed the percentage invested in which sector and the percentage in cash until it was all invested. Only then were any individual companies named.

I do have a terrible memory though

[doug2500]

They've done something / bought something anyway because the NAV has slipped to 999p

https://smithson.co.uk/latest-news/news ... %3a11P2E57

[Noiseboy]

994p now, Must have bought something!