Research Tree Research Tree Logo

  • Try our Investor Tool
  • Login
  • Sign Up

Research Tree Logo

  • Login
  • Sign Up
  • Features
  • Pricing
  • Reg.News
  • Contact
  • Try our Investor Tool
  • Login
  • Sign Up
  • Providers
  • Companies
⨯
LIVE

Event in Progress:

Join Here ×
  • Providers
  • Companies
⨯
  • Features
  • Pricing
  • Event Hub
  • Reg.News
  • Short Interest
  • Contact
Research >
The complexity premium

working
  • 18 May 2021

The complexity premium


Hipgnosis Songs Fund Limited Shs GBP (SONG:LON), 111 | ICG Enterprise Trust PLC GBP (ICGT:LON), 0 | Honeycomb Investment Trust Plc (HONY:LON), 930 | Oakley Capital Investments Limited (OCI:LON), 0 | M&G Credit Income Investment Trust Plc (MGCI:LON), 100 | NB Private Equity Partners Limited Class A (NBPU:LON), 0 | NB Global Monthly Income Fund Limited Red GBP (NBMI:LON), 83.0 | MIGO Opportunities Trust PLC GBP (MIGO:LON), 338 | AVI Global Trust PLC GBP (AGT:LON), 193

  • Kepler | Trust Intelligence
    • Thomas McMahon, CFA

    • 6 pages

Trusts, ETFs & Funds image


 
Trusts, ETFs & Funds image


Demand for alternative assets has soared in recent years, as investors have sought yield and low NAV volatility outside the bond market in a low interest rate world. The investment trust sector has been a major beneficiary, with many closed-ended funds offering these characteristics through their ability to invest in illiquid assets. Historically, alternative assets have offered the potential for higher returns by (in technical terms) harvesting the illiquidity premium. In more natural language this just means that investors pay lower prices for less liquid investments and therefore receive higher returns. Inevitably, the likelihood is that the wall of money coming into alternatives has eroded the returns available from investing in more established illiquid asset classes. In other words, the illiquidity premium has been reduced in some areas, with familiarity (and the ability to access an illiquid asset class through a more liquid closed-ended fund) meaning investors require less compensation for the higher risk of holding an illiquid asset.

Sign up for free to access

Get access to the latest equity research in real-time from 12 commissioned providers.

Get access to the latest equity research in real-time from 12 commissioned providers.


Get Started
Already a member? Log in here

The complexity premium


Hipgnosis Songs Fund Limited Shs GBP (SONG:LON), 111 | ICG Enterprise Trust PLC GBP (ICGT:LON), 0 | Honeycomb Investment Trust Plc (HONY:LON), 930 | Oakley Capital Investments Limited (OCI:LON), 0 | M&G Credit Income Investment Trust Plc (MGCI:LON), 100 | NB Private Equity Partners Limited Class A (NBPU:LON), 0 | NB Global Monthly Income Fund Limited Red GBP (NBMI:LON), 83.0 | MIGO Opportunities Trust PLC GBP (MIGO:LON), 338 | AVI Global Trust PLC GBP (AGT:LON), 193

  • Published: 18 May 2021
  • Author: Thomas McMahon, CFA
  • Pages: 6
  • Kepler | Trust Intelligence


Demand for alternative assets has soared in recent years, as investors have sought yield and low NAV volatility outside the bond market in a low interest rate world. The investment trust sector has been a major beneficiary, with many closed-ended funds offering these characteristics through their ability to invest in illiquid assets. Historically, alternative assets have offered the potential for higher returns by (in technical terms) harvesting the illiquidity premium. In more natural language this just means that investors pay lower prices for less liquid investments and therefore receive higher returns. Inevitably, the likelihood is that the wall of money coming into alternatives has eroded the returns available from investing in more established illiquid asset classes. In other words, the illiquidity premium has been reduced in some areas, with familiarity (and the ability to access an illiquid asset class through a more liquid closed-ended fund) meaning investors require less compensation for the higher risk of holding an illiquid asset.

More Content

More Content

LIBERUM: Alternatives Daily: HONY | GSEO

Companies: Honeycomb Investment Trust Plc

Liberum

Pollen Street Capital's Head of ESG Alison Collins on 'Sustainability in Lending'

Companies: Honeycomb Investment Trust Plc

Proactive

AVI Global Trust - Bargain hunting

Companies: AVI Global Trust PLC GBP

QuotedData

Honeycomb Investment Trust 'create high level income for investors focused on capital preservation'

Companies: Honeycomb Investment Trust Plc

Proactive

Oakley Capital Investments (OCI) - Capital Markets Day 2022 – let the sun shine

Companies: Oakley Capital Investments Limited

Hardman & Co

Useful Links

  • Features
  • Pricing
  • RNS/Newswires Feeds
  • Providers Hub
  • Company Hub

Account

  • Login
  • Free Trial - Join Now
  • Contact
Follow us on Linkedin Follow us on Twitter

Share:

Copyright © 2022 Research Tree | All Rights Reserved. | Terms of Service and Privacy Policy and Statement on Cookies

Research Tree will never share your details with third parties for marketing purposes. Research Tree distributes research documents that have been produced and approved by Financial Conduct Authority (FCA) Authorised & Regulated firms as well as relevant content from non-authorised sources, who are not regulated but the information is in the public domain. For the avoidance of doubt Research Tree is not giving advice, nor has Research Tree validated any of the information.

Research Tree is an Appointed Representative of Sturgeon Ventures which is Authorised and Regulated by the Financial Conduct Authority.

Top
  • Home
  • Features
  • Pricing
  • Event Hub
  • Reg.News
  • Short Interest Tracker
  • Blogs
    • Academy
    • Insights
    • News
    • Research Tree
    • The Naked Fund Manager
  • Ideas & Picks
    • Ideas Hub
    • Stock Pick League
    • Themes & Screens Hub
  • Explore Content
    • Regions
      • UK
      • Rest of EMEA
      • N America
      • APAC
      • LatAm
    • Exchanges
      • Aquis Apex
      • Australian Securities Exchange
      • Canadian Securities Exchange
      • Euronext Paris
      • London Stock Exchange (domestic)
      • SIX Swiss Exchange
    • Sectors
      • Automobile Industry
      • Banks
      • Building & Construction
      • Chemicals
      • Discretionary Personal Goods
      • Discretionary Retail
      • Energy
      • Financial Services
      • Food & Drink
      • Food Production
      • Health
      • Household Goods & DIY
      • Industrial Equipment, Goods & Services
      • Insurance & Reinsurance
      • Leisure, Tourism & Travel
      • Media
      • Other
      • Real Estate
      • Resources
      • Staple Retail
      • Technology
      • Telecoms
      • Trusts, ETFs & Funds
      • Utilities
    • Small / Large Cap
      • UK100
      • UK250
      • UK Smallcap
      • UK Other Main Markets
      • Other
    • Private/EIS
      • EIS Single Company
      • EIS/SEIS Funds
      • IHT Products
      • SEIS Single Company
      • VCT Funds
  • Providers
    • Free/Commissioned
      • Align Research
      • BNP Paribas Exane - Sponsored Research
      • BRR Media
      • Calvine Partners
      • Capital Access Group
      • Checkpoint Partners
      • Clear Capital Markets
      • Couloir Capital
      • Edison
      • Equity Development
      • eResearch
      • Fidante Partners
      • Five Minute Pitch TV
      • goetzpartners securities Limited
      • Hardman & Co
      • Inbound Capital
      • Independent Investment Research
      • InterAxS Global
      • Kepler | Trust Intelligence
      • London Stock Exchange
      • Magnitogorsk Iron and steel works
      • Mello Events
      • piworld.co.uk
      • Proactive
      • Progressive Equity Research
      • Quantum Research Group
      • QuotedData
      • RaaS - Research as a Service
      • Radnor Capital Partners
      • Research Tree
      • SEAL Advisors Ltd
      • ShareSoc
      • Trinity Delta
      • Yellowstone Advisory
    • High Net Worth Offering
      • Fox-Davies Capital
      • Allenby Capital
      • AlphaValue
      • Alternative Resource Capital
      • Arctic Securities
      • Arden Partners
      • Auctus Advisors
      • Baptista Research
      • BNP Paribas Exane - Sponsored Research
      • Canaccord Genuity
      • Cenkos Securities
      • Couloir Capital
      • Dowgate Capital
      • finnCap
      • First Berlin
      • First Sentinel
      • Hannam & Partners
      • Hybridan
      • Liberum
      • Longspur Research
      • Louis Capital
      • Magnitogorsk Iron and steel works
      • Medley Global Advisors
      • Northland Capital Partners
      • QuotedData Professional
      • Shard Capital
      • ShareSoc
      • Shore Capital
      • Singer Capital Markets
      • SP Angel
      • Stanford Capital Partners
      • Stifel FirstEnergy
      • Stockdale Securities
      • Tamesis Partners
      • The Life Sciences Division
      • VSA Capital
      • WHIreland
      • Whitman Howard
      • Yellowstone Advisory
      • Zeus Capital
    • Institutional Offering
      • Fox-Davies Capital
      • Align Research
      • Allenby Capital
      • AlphaValue
      • Alternative Resource Capital
      • Arctic Securities
      • Arden Partners
      • Auctus Advisors
      • Baptista Research
      • BNP Paribas Exane
      • BNP Paribas Exane - Sponsored Research
      • BRR Media
      • Bryan, Garnier & Co
      • Calderwood Capital
      • Calvine Partners
      • Canaccord Genuity
      • Capital Access Group
      • Cenkos Securities
      • Checkpoint Partners
      • Clear Capital Markets
      • Couloir Capital
      • Dowgate Capital
      • Edison
      • Equity Development
      • eResearch
      • Fidante Partners
      • finnCap
      • First Berlin
      • First Sentinel
      • Five Minute Pitch TV
      • goetzpartners securities Limited
      • Hannam & Partners
      • Hardman & Co
      • Hybridan
      • Inbound Capital
      • Independent Investment Research
      • InterAxS Global
      • Kepler | Absolute Hedge
      • Kepler | Trust Intelligence
      • Liberum
      • London Stock Exchange
      • Longspur Research
      • Magnitogorsk Iron and steel works
      • Mello Events
      • Northland Capital Partners
      • Numis
      • Panmure Gordon
      • Peel Hunt
      • piworld.co.uk
      • Proactive
      • Progressive Equity Research
      • Quantum Research Group
      • QuotedData
      • RaaS - Research as a Service
      • Radnor Capital Partners
      • Research Tree
      • SEAL Advisors Ltd
      • Shard Capital
      • ShareSoc
      • Shore Capital
      • SI Capital
      • Singer Capital Markets
      • SP Angel
      • Stanford Capital Partners
      • Stifel
      • Stifel FirstEnergy
      • Stockdale Securities
      • Tamesis Partners
      • The Life Sciences Division
      • Trinity Delta
      • VSA Capital
      • WHIreland
      • Whitman Howard
      • Yellowstone Advisory
      • Zeus Capital
    • Video/Audio Interviews
      • BRR Media
      • Capital Access Group
      • Couloir Capital
      • Edison
      • Equity Development
      • Five Minute Pitch TV
      • piworld.co.uk
      • Proactive
      • QuotedData
      • RaaS - Research as a Service
      • Research Tree
      • Yellowstone Advisory
    • Event Providers
      • Capital Access Group
      • Cenkos Securities
      • Couloir Capital
      • Edison
      • Equity Development
      • Hardman & Co
      • InterAxS Global
      • Kepler | Trust Intelligence
      • London Stock Exchange
      • Mello Events
      • piworld.co.uk
      • QuotedData
      • Research Tree
      • ShareSoc
      • Shore Capital
      • VSA Capital
      • Yellowstone Advisory
  • Contact
  • Sign Up
  • Sign In